Document:

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                           SECOND AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

           SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of January
2, 2000, by and among AIL Systems Inc., a Delaware corporation, EDO Corporation,
a New York corporation, and James M. Smith.

           WHEREAS, AIL Systems Inc. ("AIL") and James M. Smith ("you") entered
into an employment agreement, dated as of April 29, 1998 (the "Employment
Agreement");

           WHEREAS, contemporaneously with the date hereof, AIL and EDO
Corporation (the "Company") are entering into an Agreement and Plan of Merger
(the "Merger Agreement") pursuant to which AIL will become a wholly-owned
subsidiary of the Company;

           WHEREAS, the Company desires that you assume the positions of Chief
Executive Officer and President immediately following the effective time of the
merger contemplated under the Merger Agreement (the "Effective Time") and you
are willing to assume such positions, all on the terms and conditions set forth
herein;

           NOW, THEREFORE, the parties hereto agree as follows:

1.    Effective Date. This Agreement shall be and become effective as of the
      Effective Time. The Employment Agreement shall continue in full force in
      effect until the Effective Time, at which time it shall be amended and
      restated and superseded in its entirety by this Agreement. In the event
      that the Merger Agreement is terminated in accordance with its terms or
      that the Effective Time does not occur prior to June 15, 2000, this
      Agreement shall be rendered void and without effect and none of the
      parties hereto shall have any duties or obligations to, or rights against,
      any other party.
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2.    Employment, Duties.

      (a)   Position and Duties. Subject to the terms and conditions of this
            Agreement, the Company shall employ you as its Chief Executive
            Officer and President from and after the Effective Time until the
            expiration of the Term (as defined in Section 3) of this Agreement.
            In such position, you shall be responsible for the day to day
            operation and management of the Company and have such powers,
            duties, responsibilities and indemnifications commensurate with your
            experience and your position as Chief Executive Officer and
            President as are set forth in the Company's By-Laws and as may be
            assigned to you from time to time by the Company's Board of
            Directors. You shall also serve, without additional compensation, in
            such other position or positions with the Company and/or its
            majority-owned subsidiaries commensurate with your experience and
            position as Chief Executive Officer as the Board of Directors shall
            assign to you at any time and from time to time.

      (b)   Report to the Board. You shall report directly to the Company's
            Board of Directors. Immediately following the Effective Time, you
            shall be elected as a member of the Board of Directors of the
            Company. During the term hereof, you shall be duly and timely
            nominated by the Board of Directors for reelection as a member of
            the Board at all appropriate times.

      (c)   Working Time. You shall devote all of your working time, on an
            exclusive basis, and except for vacations, periods of illness,
            injury or other disability, to the business and affairs of the
            Company.

      (d)   Location. Your principal place of employment shall be at the
            Company's headquarters in New York City.

3.    Term. The term of this Agreement shall be the period of three (3) years
      commencing on the Effective Date (the "Term"). The Company shall give you
      at least 90 days' written notice prior to the end of the Term regarding
      whether it intends to negotiate in good faith an agreement with you to
      replace this Agreement.

4.    Compensation and Benefits. During the Term of this Agreement, the Company
      shall pay to you, and you shall accept from the Company, as full
      compensation for your services hereunder, the following:

      (a)   Base Salary. The Company shall pay to you a salary at the rate of
            $425,000 per year ("Base Salary"), to be paid in accordance with the
            Company's customary payroll practices. Base Salary will be reviewed
            at least annually at or about April

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            of each year by the Company's Compensation Committee in light of
            competitive practices, the annual base salaries paid to other
            executives of the Company and your performance and that of the
            Company. Any increase in such base salary shall not reduce or
            otherwise offset any other obligation of the Company hereunder.

      (b)   Other Compensation and Benefits. You shall be eligible to
            participate in, on a basis commensurate with your position with the
            Company as provided herein, all of the Company's employee
            compensation and benefit plans and arrangements in effect at any
            time or from time to time during the Term. You shall be entitled to
            participate in or receive benefits under any employee benefit plan
            or arrangement made available by the Company to its executives and
            key management employees, subject to and on a basis consistent with
            the terms and conditions thereof.

      (c)   Company Equity Awards. As of the Effective Time, you shall be
            granted 25,000 shares of the Company's common stock which shall not
            be transferrable and which shall remain subject to forfeiture until
            vested in accordance with the terms of such award. Such restricted
            shares shall generally vest in five approximately equal
            installments, on each of the first five anniversaries of the date of
            grant. The remaining terms and conditions of each such award shall
            be as set forth in a separate award agreement to be entered into
            between you and the Company.

      (d)   Car Allowance. During the Term, the Company will provide you with a
            new vehicle every three years.

      (e)   Vacation. You shall be eligible for vacation benefits in accordance
            with the Company's vacation policy. In no event, however, shall you
            be provided less than four weeks of vacation during any calendar
            year.

      (f)   Business Expenses. The Company shall reimburse you for reasonable
            and necessary business expenses (including travel by business
            class), in accordance with the Company's policies as the same may be
            amended from time to time, and upon presentation of appropriate
            documentation reasonably satisfactory to the Company.

5.    Special Retention Payment. If you remain continuously employed on a
      full-time basis by the Company for a period of one year following the
      Effective Time, the Company will pay to you in a lump sum, within fifteen
      days of the first anniversary of the Effective Time, an amount equal to
      your Base Salary as in effect at the Effective Time.

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6.    Termination of Employment. Your employment with the Company may terminate
      upon the occurrence of the following circumstances:

      (a)   Death and Disability. Your death or your inability to perform your
            duties hereunder by reason of disability, due to physical or mental
            illness, for a period in excess of one hundred and eighty (180)
            consecutive business days. Your employment may be terminated by the
            Company by reason of your disability, pursuant to this subsection
            (a) only if you do not return to work within thirty (30) days after
            a notice of termination has been provided to you in writing by the
            Company.

      (b)   Cause. Termination of your employment by the Company for "Cause",
            which for purposes of this Agreement shall mean:

            (i)   the willful and continued failure by you to substantially
                  perform your duties hereunder (other than any such failure
                  resulting from your disability due to physical or mental
                  illness), after you have received from the Board of Directors
                  of the Company a written demand for substantial performance
                  that specifically identifies the manner in which the Board of
                  Directors believes you have not substantially performed your
                  duties and a reasonable opportunity under the circumstances to
                  cure any such failure; or

            (ii)  the willful engaging by you in gross misconduct materially and
                  demonstrably injurious to the Company.

           For purposes of this subsection (b), no act, or failure to act, shall
           be considered "willful" unless done, or omitted to be done, by you
           not in good faith and without reasonable belief that your act or
           omission was in the best interest of the Company. Notwithstanding the
           foregoing, your employment shall not be deemed to have terminated for
           Cause unless and until there shall have been delivered to you a copy
           of a resolution duly adopted by the affirmative vote of not less than
           three-quarters (3/4) of the membership of the Board of Directors of
           the Company (excluding you) at a meeting of the Board of Directors
           called and held for such a purpose (after reasonable notice to you
           and an opportunity for you, together with your counsel, to be heard
           before the Board of Directors), finding that in the good faith
           opinion of the Board of Directors you were guilty of the conduct set
           forth in this subparagraph (b) and specifying the particular details
           thereof in detail. Such finding by the Board of Directors shall be
           conclusive and binding upon all parties,

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           and the Board of Directors is hereby granted discretionary authority
           to make such determination.

            (c)   Retirement. Termination of your employment by you due to your
                  retirement in accordance with the terms of any Company
                  retirement plan in which you participate.

            (d)   Good Reason. Termination of your employment at any time by you
                  for "Good Reason." For the purpose of this Agreement, Good
                  Reason shall mean:

                  (i)   without your express written consent, the assignment to
                        you of any duties inconsistent with your position,
                        duties, responsibilities and status at the Company, as
                        provided herein, or a change inconsistent with the
                        provisions of this Agreement in your reporting
                        responsibilities, titles or offices; provided that, in
                        the event that there occurs a Change of Control of the
                        Company (as defined in the Company's 1996 Long-Term
                        Incentive Plan, as currently in effect), you shall not
                        have "Good Reason" following such event under this
                        subclause (i) so long as you continue to be responsible
                        for the day to day operation and management of the
                        Company (or the successor in interest to the Company);

                  (ii)  a reduction in your Base Salary (as defined in Section
                        4(a)), as the same may be increased from time to time.

                  (iii) failure to allow you to participate in the employee
                        benefit and executive compensation plans and
                        arrangements in accordance with the provisions of
                        Section 4(b).

                  (iv)  the relocation of the Company's principal executive
                        offices to a location outside the New York metropolitan
                        area, or a requirement that you be based anywhere other
                        than the Company's principal executive offices or, in
                        the event you consent to any such relocation of the
                        Company's principal executive offices, the failure by
                        the Company to pay (or reimburse you for) all reasonable
                        moving expenses incurred by you relating to a change of
                        your principal residence in connection with such
                        relocation and/or to indemnify you against any loss
                        realized in the sale of your principal residence in
                        connection with any such change of residence. For
                        purposes of this paragraph, "loss" is defined as the
                        amount by which the higher of (a) your aggregate
                        investment in such residence and (b) the fair market
                        value of such residence as determined by any real estate
                        appraiser designated by you and reasonably

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                        satisfactory to the Company, exceeds the actual sale
                        price of such residence.

                  (v)   the failure of the Company to obtain the assumption of,
                        and agreement to perform, this Agreement by any
                        successor (whether direct or indirect, by purchase,
                        consolidation or otherwise) to all or substantially all
                        of the assets of the Company, by agreement in form and
                        substance reasonably satisfactory to you.

      7.    Compensation Upon Termination.

            (a)   Death or Disability. If your employment is terminated by
                  reason of your death or disability pursuant to Section 6(a),
                  you or your estate, as the case may be, shall receive your
                  Base Salary through the date of your termination and such
                  other compensation and benefits to which you are entitled in
                  accordance with the terms and conditions of the compensation
                  and benefit plans and arrangements in which you are then a
                  participant.

            (b)   Cause.If your employment is terminated for Cause pursuant to
                  Section 6(b), you shall not be entitled to any compensation
                  for any period after termination, but you shall receive such
                  compensation and benefits for time worked prior to such
                  termination and to which you are entitled in accordance with
                  the terms of the compensation and benefit plans in which you
                  are then a participant.

            (c)   Good Reason; Without Cause. If your employment is terminated
                  by you for Good Reason pursuant to Section 6(c), or is
                  terminated by the Company for any reason other than death,
                  disability, Cause or mutual written agreement, the Company
                  will pay to you the amount set forth in subsection (i), below,
                  and in the manner provided in subsection (ii), below. Such
                  amount shall be in lieu of any other severance or termination
                  benefits to which you may be entitled under the Company's
                  plans, policies, programs or agreements.

                  (i)   A termination payment ("Termination Payment") equal to:

                        (A)   The product of (x) the number three multiplied by
                              (y) the sum of (A) your annual Base Salary as
                              defined in Section 4(a), plus (B) the average
                              annual Company incentive amount awarded to you for
                              the three years preceding the termination of your
                              employment (including, for this purpose, any
                              bonuses payable to you by AIL), or the previous
                              year's incentive if higher, minus

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                        (B)   If your employment terminates on or after (but not
                              before) the first anniversary of the Effective
                              Time, an amount equal to the amount paid to you
                              pursuant to Section 5 times

                             (i)   one, if your termination of employment with
                                   the Company occurs at the first anniversary
                                   of the Effective Time or

                             (ii)  a fraction, the numerator of which is the
                                   number of whole calendar months between the
                                   termination of your employment and the end of
                                   the three-year period following the Effective
                                   Time, and the denominator of which is twenty-
                                   four, if your termination of employment
                                   occurs after such first anniversary and prior
                                   to the third anniversary of the Effective
                                   Time.

            (ii)  The Termination Payment will be paid in cash in a single sum
                  promptly following the date of termination. For the three-year
                  period following your termination of employment, you (and to
                  the extent covered at the date of your termination of
                  employment, your spouse and your eligible dependents) shall be
                  entitled to continued coverage under the Company's medical,
                  life and disability plans for employees, as the same may be
                  modified from time to time for employees generally, on the
                  same terms and conditions as though you had continued in the
                  Company's employ (or, at the Company's election, coverage
                  equivalent thereto). During the same period you shall be
                  entitled to five years (or up to age 65 whichever is earlier)
                  of continued participation service accrual under each employee
                  retirement plan in which you are then participating, whether
                  or not qualified (the "Pension Plans"), to a period not to
                  exceed the granting of credited service to all Plan
                  participants. Upon the completion of the period set forth
                  above, you will also be entitled to those benefits (or their
                  equivalent) to which retirees of the Company may be entitled
                  in accordance with the terms and conditions of the Pension
                  Plans and the medical and life insurance plans for retirees,
                  as those plans may be modified from time to time for employees
                  generally.

            (iii) Notwithstanding the foregoing, in the event that the granting
                  of vested service accrual credit to you under the Pension Plan
                  could, in the reasonable opinion of the Company, adversely
                  affect the tax-qualified status of the Pension Plan, such
                  service credit shall not be granted. In lieu thereof, the
                  Company shall pay you, upon the expiration of the period set
                  forth in (ii) above, a single cash payment equal to the
                  actuarial equivalent of the increase in your retirement
                  benefit that would

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                  have resulted if the service credit had been granted. This
                  amount will be determined by the enrolled actuary regularly
                  consulted by the Company for the Pension Plan and shall be
                  made in accordance with the terms of the Pension Plan in
                  effect at that time. Such determination will be final and
                  binding upon all parties.

            (iv)  Upon a termination described in Section 7(c) prior to the
                  second anniversary of the Effective Date, all of the shares of
                  Company restricted stock granted pursuant to Section 4(c)
                  shall fully and immediately vested on the date your employment
                  terminates and all of the shares of the Company common stock
                  subject to stock options issued in substitution of the options
                  granted in respect of Ail common stock on December 3, 1999
                  (the "Special Grant") shall become and remain exercisable
                  thereunder for a period of one year from the date of your
                  termination of employment. Following the second anniversary of
                  the Effective Time, no special vesting shall be applicable to
                  the restricted shares or the Special Option in the event of
                  your termination of employment for any reason.

            (v)   Upon any termination described in Section 7(c) (whenever
                  occurring during the Employment Term), any options to purchase
                  Company stock granted in substitution of options (other than
                  the Special Option) granted to you prior to the Effective Time
                  under the AIL Stock Option Plan shall be deemed to be and
                  shall become fully vested and nonforfeitable and immediately
                  exercisable, and remain exercisable for three years after the
                  date of your termination of employment.

            (vi)  If your employment terminates prior to the date as of which
                  you shall have accrued the right to be paid the special
                  retention bonus payable under Section 5, the Company shall
                  also pay you an amount equal to the amount that would have
                  been payable to you thereunder on the first anniversary of the
                  Effective Time had you remained in the Company's employ.

      (d)   Full Satisfaction. Payment of any amounts under Section 7(c) shall
            be in full and complete satisfaction of any claims that you may have
            under this Agreement or otherwise arising in connection with your
            employment with or termination of employment by the Company and/or
            any of its subsidiaries; provided that nothing contained in this
            Section 7(d) shall be construed to limit your right to any vested
            benefits accrued or payable under the terms of any employee benefit
            plan (other than any severance plan) established and maintained by
            the Company, any vested

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            rights under any equity based incentive award, whether granted to
            you under the terms of this Agreement or otherwise, or any of its
            subsidiaries or your right to indemnification with respect to his
            service as an employee, officer or director of the Company or any of
            its subsidiaries.

8           Gross-up Payment.

      (a)   Imposition of Excise Tax. In the event that any amount or benefit
            paid or distributed to you pursuant to this Agreement, taken
            together with any amounts or benefits otherwise paid or distributed
            to you by the Company, any subsidiary or any affiliated company
            (collectively, the "Covered Payments"), would be an "excess
            parachute payment" as defined in Section 280G of the Internal
            Revenue Code of 1986, as amended (the "Code"), and would thereby
            subject you to the tax (the "Excise Tax") imposed under Section 4999
            of the Code (or any similar tax that may hereafter be imposed), the
            Company shall pay to you immediately following your termination of
            your employment an additional amount (the "Tax Adjustment") such
            that the net amount retained by you with respect to such Covered
            Payments, after deduction of any Excise Tax on the Covered Payments
            and any Federal, state and local income tax, employment tax and
            Excise Tax (including any interest and penalties) on the Tax
            Adjustment provided for by this Section 8, but before deduction for
            any Federal, state or local income or employment tax withholding on
            such Covered Payments, shall be equal to the amount of the Covered
            Payments.

      (b)  Calculation Assumptions. For purposes of determining whether any of
           the Covered Payments will be subject to the Excise Tax and the amount
           of such Excise Tax,

           (i)    such Covered Payments will be treated as "parachute payments"
                  within the meaning of Section 280G of the Code, and all
                  "parachute payments" in excess of the "base amount" (as
                  defined under Section 280G(b)(3) of the Code) shall be treated
                  as subject to the Excise Tax, unless, and except to the extent
                  that, in the good faith judgment of the Company's independent
                  certified public accountants or tax counsel selected by such
                  Accountants (the "Accountants"), the Company has a reasonable
                  basis to conclude that such Covered Payments (in whole or in
                  part) either do not constitute "parachute payments" or
                  represent reasonable compensation for personal services
                  actually rendered (within the meaning of Section 280G(b)(4)(B)
                  of the Code) in excess of the "base amount," or such
                  "parachute payments" are otherwise not subject to such Excise
                  Tax, and

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            (ii)  the value of any non-cash benefits or any deferred payment or
                  benefit shall be determined by the Accountants in accordance
                  with the principles of Section 280G of the Code.

      (c)   Overpayment Adjustment. In the event that the Excise Tax is
            subsequently determined by the Accountants or pursuant to any
            proceeding or negotiations with the Internal Revenue Service to be
            less than the amount taken into account hereunder in calculating the
            Tax Adjustment made, you shall repay to the Company, at the time
            that the amount of such reduction in the Excise Tax is finally
            determined, the portion of such prior Tax Adjustment that would not
            have been paid if such Excise Tax had been applied in initially
            calculating such Tax Adjustment, plus interest on the amount of such
            repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
            Notwithstanding the foregoing, in the event any portion of the Tax
            Adjustment to be refunded to the Company has been paid to any
            Federal, state or local tax authority, repayment thereof shall not
            be required until actual refund or credit of such portion has been
            made to you, and interest payable to the Company shall not exceed
            interest received or credited to you by such tax authority for the
            period it held such portion. You and the Company shall mutually
            agree upon the course of action to be pursued (and the method of
            allocating the expenses thereof) if your good faith claim for refund
            or credit is denied.

      (d)  Underpayment Adjustment. In the event that the Excise Tax is later
           determined by the Accountants or pursuant to any proceeding or
           negotiations with the Internal Revenue Service to exceed the amount
           taken into account hereunder at the time the Tax Adjustment is made
           (including, but not limited to, by reason of any payment the
           existence or amount of which cannot be determined at the time of the
           Tax Adjustment), the Company shall make an additional Tax Adjustment
           in respect of such excess (plus any interest or penalty payable with
           respect to such excess) at the time that the amount of such excess is
           finally determined.

      (e)   Timing of Payment. Any Tax Adjustment (or portion thereof) shall be
            paid to you not later than 10 business days following the payment of
            the Covered Payment to which it relates; provided, however, that if
            the amount of such Tax Adjustment (or portion thereof) cannot be
            finally determined on or before the date on which payment is due,
            the Company shall pay to you by such date an amount estimated in
            good faith by the Accountants to be the minimum amount of such Tax
            Adjustment and shall pay the remainder of such Tax Adjustment
            (together with interest at the rate provided in Section
            1274(b)(2)(B) of the Code) as soon as the amount thereof can be
            determined, but in no event later than 45 calendar days after
            payment of the related Covered Payment. In the event that the amount
            of

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           the estimated Tax Adjustment exceeds the amount subsequently
           determined to have been due, such excess shall constitute a loan by
           the Company to Executive, payable on the fifth business day after
           written demand by the Company for payment (together with interest at
           the rate provided in Section 1274(b)(2)(B) of the Code).

      (f)  Impact of Section 8. Notwithstanding anything else to the contrary
           contained in this Section 8, you shall not be required to take any
           actions or pay any amounts under this Section that will in the
           aggregate, cause you to receive less compensation (on a net-after tax
           basis) than if this Section 8 was omitted from this Agreement in its
           entirety.

9.    Successors. As used in this Agreement, "the Company" shall mean the
      Company as hereinbefore defined and any successor (whether direct or
      indirect, by purchase, merger, consolidation, reorganization or otherwise)
      to all or substantially all of the assets of the Company. This Agreement
      shall inure to the benefit of and be enforceable by your personal or legal
      representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees.

10.   Covenants. Confidential Information. You acknowledge and agree that you
      have and will come into contact with, have access to and learn various
      technical and nontechnical trade secrets and other Confidential
      Information, which are the property of the Company. Such Confidential
      Information includes but is not limited to methods, procedures, devices
      and other means used by the Company in the conduct of its business,
      marketing plans and strategies, pricing plans and strategies, data
      processing programs, databases, formulae, secret processes, machines and
      adaptions thereto, inventions, research projects, and all other matters of
      a technical nature, all of which Confidential Information is not publicly
      available, but has been developed by the Company at its great effort and
      expense; names and addresses of the Company's customers and their
      representatives responsible for entering into contracts for the Company's
      services, customer leads or referrals, specific customer needs and
      requirements and the manner in which they have been met by the Company,
      information with respect to pricing, costs, profits, sales, markets, plans
      for future business and other development, all of which Confidential
      Information is not available from directories or other public sources; and
      information with respect to the Company's employees, their names and
      addresses, compensation, experience, qualifications, abilities, job
      performance and similar information. All of the Confidential Information
      has been developed, acquired or compiled by the Company at its great
      effort and expense.

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      (a)   Non-Disclosure of Confidential Information. Except as may be
            required in the proper performance of your duties hereunder or as
            may be compelled by administrative or judicial subpoena or other
            process, you acknowledge and agree that any disclosure, divulging,
            revealing or other use of any of the aforesaid Confidential
            Information by you, other than in connection with the Company's
            business will be highly detrimental to the business of the Company
            and serious loss of business and pecuniary damage may result
            therefrom. Accordingly, you specifically covenant and agree to hold
            all such Confidential Information and any documents containing or
            reflecting the same in the strictest confidence, and you will not,
            both during employment with the Company or at any time thereafter,
            without the Company's prior written consent, disclose, divulge or
            reveal to any person whomsoever, or use for any purpose other than
            the exclusive benefit of the Company, any Confidential Information
            whatsoever, whether contained in your memory or embodied in writing
            or other physical form.

      (b)   Covenant Not to Compete. You acknowledge and agree that the Company
            is engaged in a highly competitive business, and by virtue of your
            position and responsibilities with the Company, and your access to
            the Confidential Information, engaging in any business which is
            directly or indirectly competitive with the Company will cause it
            great and irreparable harm. Consequently, you covenant and agree
            that during the Term, or for the two-year period following your
            termination of employment hereunder, you shall not directly or
            indirectly own, manage, operate, control, be employed by,
            participate in, or be connected with, in any manner (other than as a
            shareholder of less than 2% of the outstanding equity of any
            publicly traded company), any business engaged in whole or in part
            in the pursuit of electronic counter-measures, environmental
            monitoring, radar systems or satellite communications in the
            continental United States, the same being the same geographic area
            in which the Company's business is conducted, without the prior
            written specific consent of the Company. If requested, this consent
            shall not be unreasonably withheld where the elements of competition
            are not direct, or specific, to the Company's business.

      (c)   Non-Solicitation of Customers. You acknowledge and agree that during
            the course and solely as a result of your employment with the
            Company, you have and will become aware of some, most or all of the
            Company's customers and clients, their names and addresses, their
            representatives responsible for engaging the Company's services,
            their specific needs and requirements, and lead and referrals to
            prospective customers and clients. You further acknowledge and agree
            that the loss of such customers and clients would cause the Company
            great and irreparable harm. Consequently, you covenant and agree
            that in the event of the termination of your employment with the
            Company, whether voluntarily or

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            involuntarily, you will not, for the two year period following your
            termination of employment hereunder, directly or indirectly solicit
            to do business of a nature that is directly or indirectly
            competitive with the business of the Company or any of its
            subsidiaires with any customer or client, former customer or client
            or prospective customer or client of the Company with whom you came
            into contact while employed by the Company or who was known to you
            to be a current, former or prospective customer or client of the
            Company. For purposes of the immediately preceeding sentence, a
            person or entity shall be treated as a prospective customer only if
            and to the extent that the Company has undertaken a deliberate
            effort to obtain the business of such person or entity and has a
            reasonable expectation of obtaining such business.

      (d)   Non-Solicitation of Employees. You acknowledge and agree that during
            the course of employment by the Company, you have and may hereafter
            come into contact with some, most or all of the Company's employees,
            their knowledge, skills, abilities, salaries, commissions, benefits
            and other matters with respect to such employees not generally known
            to the public. You further acknowledge and agree that any
            solicitation, luring away or hiring of such employees of the Company
            will be highly detrimental to the business of the Company and will
            cause the Company serious loss of business and great and irreparable
            harm. Consequently, you covenant and agree that during the course of
            employment by the Company and for the two year period following the
            termination of your employment hereunder, you shall not directly or
            indirectly, on behalf of yourself or another, solicit, lure or hire
            any employees of the Company of whom you became aware while employed
            by the Company, or assist or aid in any such activity.

      (e)   Enforcement of Covenants. You acknowledge and agree that compliance
            with the covenants set forth in this Section 10 is necessary to
            protect the business and goodwill of the Company and that any breach
            of this Section 10 or any subparagraph hereof will result in
            irreparable and continuing harm to the Company, for which money
            damages may not provide adequate relief. Accordingly, in the event
            of any breach or anticipatory breach of Section 10 by you, the
            Company and you agree that the Company shall be entitled to the
            following particular forms of relief as a result of such breach, in
            addition to any remedies otherwise available to it at law or equity:
            (a) injunctions, both preliminary and permanent, enjoining or
            restraining such breach or anticipatory breach, and you hereby
            consent to the issuance thereof forthwith and without bond by any
            court of competent jurisdiction; and (b) recovery of all reasonable
            sums and costs, including attorneys' fees, incurred by the Company
            to enforce the provisions of Section 10.

                                       13
<PAGE>
      (f)   Prior Commitments. The covenants set forth in this Section 10
            supplement, and do not supersede, the covenants contained in any
            other agreement between you and the Company.

      (g)   Interpretation. Nothing in Section 10(c) or (d) shall be construed
            to prevent any entity to which you provide services from
            independently enagaging in conduct of a nature and type that you
            would be prohibited from undertaking by reason of such Sections so
            long as you do not, directly or indirectly, assist such entity in
            such conduct.

11.   Arbitration of Disputes and Jury Waivers. Except as set forth in Section
      10 of this Agreement, the parties hereto agree to arbitrate any dispute,
      claim, or controversy (claim) against each other arising out of the
      cessation of your employment, any claim of unlawful discrimination or
      harassment that might or did arise during or as a result of your
      employment which could have been brought before an appropriate government
      administrative agency or in an appropriate court, including but not
      limited to claims of age discrimination under the Age Discrimination in
      Employment Act of 1967, as amended, as well as any claim or controversy
      under this Agreement.

      The arbitration shall be arbitrated by one arbitrator in accordance with
      the National Rules for the Resolution of Employment Disputes of the
      American Arbitration Association. The parties hereto agree that the
      arbitration shall take place in Suffolk County, New York. The arbitrator's
      fees will be shared equally by the parties. The decision or award of the
      arbitration shall be final and binding upon the parties. Any arbitral
      award may be entered as a judgment or order in any court of competent
      jurisdiction.

      Any claims under Section 10 of this Employment Agreement shall not be
      subject to arbitration, but shall be subject to the remedies set forth
      therein.

      (a)   Jury Trial. If for any reason this Arbitration Provision is declared
            unenforceable, you agree to waive any right you may have to a jury
            trial with respect to any dispute or claim against the Company
            relating to this Agreement, your employment, and the termination or
            modification of any terms and conditions of employment, including
            but not limited to claims of age discrimination under the Age
            Discrimination in Employment Act of 1967, as amended.

      (b)   Venue.In the event this Arbitration Provision is declared
            unenforceable for any reason, or in the event of any litigation
            arising pursuant to Section 10 of this Employment Agreement, the
            parties agree that, with respect to any litigation

                                       14
<PAGE>
            arising pursuant to this Agreement, Suffolk County, New York shall
            be the only proper county for purposes of venue. The parties further
            agree that they will submit to the personal jurisdiction of any
            Court (Federal or State) located within New York State.

12.   Miscellaneous.

      (a)   Waiver. No waiver or modification of the Agreement, nor any portion
            hereof, shall be valid unless in writing and signed by you and such
            officers as may be specifically designated by the Board of Directors
            of the Company. No waiver by either party hereto at any time of any
            breach by the other party hereto of, or compliance with, any
            condition or provision of this Agreement to be performed by such
            other party shall be deemed a waiver of similar or dissimilar
            provisions or conditions at the same or at any prior or subsequent
            time. Any Notice of Termination by you must be given not later than
            forty-five (45) days after the occurrence of the event which you
            claim to constitute Good Reason and any Notice of Termination by the
            Company must be given not later than forty-five (45) days after the
            Company becomes aware of the occurrence of the event claimed by the
            Company to constitute Cause or Disability. Subject to the preceding
            sentence, any failure by the Company to claim promptly that any
            event constitutes Cause, or failure by you to claim promptly that
            any event constitutes Good Reason, shall not preclude either the
            Company or you from claiming subsequently that such event or any
            earlier or later event constitutes Cause or Good Reason. No
            agreements or representation, oral or otherwise, express or implied,
            with respect to the subject matter hereof have been made by any
            party which are not set forth expressly in this Agreement.

      (b)   Notices. All notices required or permitted to be given under the
            terms of the Agreement, or which any of the parties desires to give
            hereunder, shall be in writing and delivered personally or be sent
            by registered mail or certified mail, postage prepaid, return
            receipt requested, or by reputable private courier addressed as
            follows:

           If to the Company:        EDO Corporation
                                     60 E. 42nd St.
                                     New York, New York
                                     Attn: Secretary

           If to you:                Mr. James M. Smith
                                     8 Dexter Court
                                     Hauppauge, NY 11788

                                       15
<PAGE>
            Any party may change the address to which notice is to be sent to it
            or to him by notice in writing to the other party as provided above.

      (c)   Governing Law. This Agreement shall be subject to and governed by
            the laws of the State of New York without regard to its conflict of
            laws provisions.

      (d)   Severability. If any provision(s) of this Agreement shall be found
            invalid or unenforceable, in whole or in part, then such
            provision(s) shall be deemed to be modified or restricted to the
            extent and in the manner necessary to render the same value and
            enforceable, or shall be deemed excised from the Agreement, as the
            case may require, and this Agreement shall be construed and enforced
            to the maximum extent permitted by law, as if such provision(s) had
            been originally incorporated herein as so modified or restricted or
            as if such provision(s) had not been originally incorporated herein
            as the case may be.

      (e)   Legal Fees and Expenses. If, following any final adjudication of
            any proceding, you shall have prevailed as to at least one material
            issue presented in any arbitration or other contest regarding your
            rights or obligations under this Agreement or regarding the validity
            or enforceability of any provision of this Agreement, the Company
            shall pay any legal fees and expenses which you shall have incurred
            as a result of such arbitration or contest.

      (f)   Counterparts. This Agreement may be executed in multiple
            counterparts, each of which shall be deemed an original.

                                       16
<PAGE>
                                          EDO CORPORATION

                                          By:_________________________________
                                          Name:
                                          Title:

                                          AIL SYSTEMS INC.
                                          By:_________________________________
                                          Name:
                                          Title:

                                             _________________________________
                                             JAMES M. SMITH

                                       17EXHIBIT 4.2

           INDIANAPOLIS POWER & LIGHT COMPANY

                           TO

            AMERICAN NATIONAL BANK AND TRUST
                   COMPANY OF CHICAGO
                         Trustee

          Thirty-Second Supplemental Indenture

                Dated as of June 1, 1989

            ESTABISHING FIRST MORTGAGE BONDS,

                 9 5/8% Series, Due 2019

                   TABLE OF CONTENTS*
                           OF
          THIRTY-SECOND 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-First 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                                        8
            Transfer of bonds                                        8
            Series limited to $50,000,000                            8
SECTION 3   Form of fully registered bond                            9
            Form of Trustee's certificate on bonds                  10
SECTION 4   Temporary bonds                                         14
SECTION 5   Annual Payments Maintenance & Improvement Fund          14
SECTION 6   Compliance with Section 47 of Original Mortgage
              with respect to dividend restrictions                 14
SECTION 7   Condition of redemption prior to June 1, 1994           14
SECTION 8   Acceptance of trusts by Trustee and conditions
              of acceptance                                         15
SECTION 9   Successors and Assigns                                  15
SECTION 10  Limitation of rights hereunder                          15

*Table of contents is not part of the Thirty-Second
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

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 Thirty-Second Supplemental Indenture, dated as
of June 1, 1989, 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 and as of
October 1, 1986; 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, 9 5/8% Series, due 2019" (the
bonds of said series being hereinafter sometimes referred
to as the "2019 Bonds"), limited to the aggregate
principal amount of Fifty Million Dollars ($50,000,000);
and

     WHEREAS, all things necessary to make the 2019 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-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 Thirty-Second Supplemental Indenture, and the
terms of the 2019 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-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 2019 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-Second Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-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, 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,
crossarms, 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 DISTRIBUING 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,
ad 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-ways 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 other 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 Fifty Million Dollars ($50,000,000) to be issued under
and secured by the Mortgage, to be designated "9 5/8%
Series, due 2019", each of which shall also bear the
descriptive title "First Mortgage Bonds"; said bonds shall
mature on June 1, 2019, 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 June 1 and
December 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 2019 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 2019 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 2019 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 2019 Bonds shall be dated as of the date of
authentication thereof, 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 2019 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 "Redemption Premium" in the form of 2019 Bonds
hereinafter recited, if redeemed otherwise than by the
applicant 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 June
1, 1994, none of the 2019 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 cost to the Company, computed in
accordance with generally accepted financial practice of
less than 9.625 per centum per annum.

     Upon the notice and in the manner and with the
effect provided in the Mortgage and in this Section 2,
the 2019 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 2019 Bonds so to be redeemed and accrued interest to
the date of redemption.

     The notice required for the redemption of the 2019
Bonds shall be as provided in Section 59 of the Mortgage.

     At the option of the holder, any 2019 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 2019 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 2019 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 2019 Bonds other than for any tax
or taxes or other governmental charge required to be paid
by the Company.

     The 2019 Bonds shall be limited to an aggregate
principal amount of Fifty Million Dollars ($50,000,000)
and shall be issued under the provisions of Article VI
and Article VII of the Original Mortgage.

     SECTION 3.  The 2019 Bonds, and the Trustee's
Certificate to be endorsed thereon, shall be in the
following forms, respectively:

                 [FORM OF FACE OF BOND]
            INDIANPOLIS POWER & LIGHT COMPANY
      FIRST MORTGAGE BOND, 9 5/8% SERIES, DUE 2019
                    Due June 1, 2019

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 June 1, 2019, 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 June or the first day of
December next preceding the date of this bond, at the
rate of 9 5/8 per centum 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, subject to the exception provided in Section 2 of
the Thirty-Second 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-Second 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, 9 5/8% SERIES, DUE 2019
                    Due June 1, 2019

     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, 9 5/8% Series, due 2019
(herein sometimes called the "2019 Bonds") limited in
aggregate principal amount to Fifty Million Dollars
($50,000,000) and established by a Thirty-Second
Supplemental Indenture, dated as of June 1, 1989, 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 herein 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 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 the
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 2019 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 the
payment of the charges hereinafter mentioned, the 2019
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 2019 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 2019 Bonds for a period of ten
(10) days next preceding any interest payment date of
said bonds.

     The 2019 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 2019 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 "Redemption
Premium" if redeemed 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 June 1, 1994, none of
the 2019 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 cost to the Company, computed in accordance with
generally accepted financial practice, of less than 9.625
per centum per annum:

 If Redeemed                   If Redeemed
 During the                     During the
   Twelve                         Twelve
   Months'                       Months'
Period Ending    Redemption   Period Ending     Redemption
  With the        Premium        With the        Premium
Thirty-First                   Thirty-First
Day of May of                 Day of May of
  the Year                       the Year
   Stated                         Stated
    1990           9.625%          2000           4.813%
    1991           9.144%          2001           4.331%
    1992           8.663%          2002           3.850%
    1993           8.181%          2003           3.369%
    1994           7.700%          2004           2.888%
    1995           7.219%          2005           2.406%
    1996           6.738%          2006           1.925%
    1997           6.256%          2007           1.444%
    1998           5.775%          2008           0.963%
    1999           5.294%          2009           0.481%

and without premium if redeemed after May 31, 2009.

     The 2016 Bonds are subject to redemption 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 2019 Bonds so 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 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 2019 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 2019 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-Second 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 2019 Bonds, and
the Company reserves the right, without any consent of,
or other action by, the holders of the 2019 Bonds, to
amend, modify or delete the provisions of the Mortgage
relating to such Maintenance and Improvement Fund, and by
acceptance of the 2019 Bonds, the holders thereof waive
any right or privilege so to consent or take any other
action with respect thereto.  Notwithstanding the
foregoing, and irrespective of its right so to do, the
Company covenants not to apply any cash in the
Maintenance and Improvement Fund toward the redemption of
the 2019 Bonds prior to June 1, 1994.

     SECTION 6.  The Company covenants that, so long as
any of the 2019 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.  In the event the Company elects to
redeem any of the 2019 Bonds prior to June 1, 1994 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
cost to the Company, computed in accordance with
generally accepted financial practice, of less than 9.625
per centum per annum and that said redemption operation
is in full compliance with the terms and conditions of
Section 2 of this Thirty-Second Supplemental Indenture.

     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-Second Supplemental
Indenture or of the bonds issued hereunder.

     SECTION 9.  Whenever in this Thirty-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
Thirty-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 Thirty-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 Thirty-Second
Supplemental Indenture or any covenant, condition or
stipulation hereof; and all the covenants, conditions,
stipulations, promises and agreements in this Thirty-
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 2019 Bonds issued hereunder, except as
herein otherwise provided and except insofar as the same
may be inconsistent with the provisions of this Thirty-
Second Supplemental Indenture.

     SECTION 12.  This Thirty-Second Supplemental
Indenture is dated as of June 1, 1989, 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 hereunder 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/ Marcus E. Woods
(SEAL)                        Marcus E. Woods, Vice-President

Attest:

/s/ Arnold A. Gordus
Arnold A. Gordus, Assistant Secretary

                         AMERICAN NATIONAL BANK AND TRUST
                         COMPANY OF CHICAGO

                         By   /s/ Ronald B. Bremen
(SEAL)                        Ronald B. Bremen, Vice-President

Attest:

/s/ Robert M. Selangowski
Robert M. Selangowski, Assistant Secretary

STATE OF INDIANA         )
                         :  SS.:
COUNTY OF MARION         )

     On this 31st day of May, in the year l989, before
me, a Notary Public in and for the County and State
aforesaid, personally came MARCUS E. WOODS, Vice-
President, and ARNOLD A. GORDUS, 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
ARNOLD A. GORDUS being by me severally duly sworn did
depose and say that the said MARCUS E. WOODS resides in
Hendricks County, Indiana and the said ARNOLD A. GORDUS
resides in Marion County, Indiana; that said MARCUS E.
WOODS is Vice-President and said ARNOLD A. GORDUS 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 May, 1989.

                             /s/ Gloria Kay Bryant
                             Gloria Kay Bryant, Notary Public

My Commission Expires:
     June 11, 1991
My County of Residence is:
     Marion                           (Notarial Seal)

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

     On this 31st day of May, in the year 1989, 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 May, 1989.

                              /s/ Mary T. Denham
                              Mary T. Denham, Notary Public

(NOTARIAL SEAL)

My Commission Expires:
     March 11, 1990

My County of Residence is:
     Cook

             This instrument was prepared by
                    MARCUS E. WOODS,
                     Attorney at Law

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO

                                                TRUSTEE

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

                      THIRTY-THIRD SUPPLEMENTAL INDENTURE

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

                         DATED AS OF AUGUST 1, 1989

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            7.45% SERIES, DUE 2019

                               TABLE OF CONTENTS*

                                       of

                      THIRTY-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 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-second series of bonds
              and kind and denominations thereof...........       6
            Designation of Company office as place of
              payment or, if not maintained, designation
              of 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 $23,500,000...................     13
Section 3   Form of fully registered bond...................     14
            Form of Trustee's certificate on bonds..........     16
Section 4   Temporary bonds.................................     19
Section 5   Payment of principal and interest: credits......     20
_________________________
*Table of Contents is not part of the Thirty-Third
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

                                                                PAGE
                                                                ----
Section 6   Annual Payments for Maintenance and Improvement
              Fund..........................................     20
Section 7   Compliance with Section 47 of Original Mortgage
              with respect to dividend restrictions.........     21
Section 8   Acceptance of trusts by Trustee and conditions
              of acceptance.................................     21
Section 9   Successors and assigns..........................     21
Section 10  Limitation of rights hereunder..................     21
Section 11  Compliance with terms, provisions and
              conditions of Mortgage........................     22
Section 12  Execution in counterparts.......................     22
Testimonium.................................................     23
Signatures and Seals........................................     24
Acknowledgements............................................     25

                                       ii

THIS THIRTY-THIRD SUPPLEMENTAL INDENTURE, dated as of
August 1, 1989, 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; witnesseth that:

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

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
(hereinafter sometimes called the "Loan Agreement"),
dated as of August 1, 1989, with the Indiana Employment
Development Commission (the "Commission"), in order to
obtain funds for the acquisition, construction,
installation and equipping by the Company of certain
pollution control facilities, sewage facilities, solid
waste disposal facilities, and local district heating or
cooling facilities (the "Project"), and pursuant to the
Loan Agreement the Company has agreed to issue its bonds
under the Mortgage and this Thirty-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, 7.45% Series, due 2019" (the
bonds of said series being hereinafter sometimes referred
to as the "2019 PC Bond"), limited to the aggregate
principal amount of Twenty-Three Million Five Hundred
Thousand Dollars ($23,500,000); and

WHEREAS, all things necessary to make the 2019 PC Bond
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-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 Thirty-Third Supplemental Indenture, and the terms
of the 2019 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-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 thereto;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the acceptance or
purchase of the 2019 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-Third Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-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, 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, crossarms, 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 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 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-Three Million Five Hundred Thousand Dollars
($23,500,000) to be issued under and secured by the
Mortgage, to be designated "7.45% Series, due 2019", each
of which shall also bear the descriptive title "First
Mortgage Bonds"; said bonds shall mature on August 1,
2019, 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; 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, except as provided below, 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 2019 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 2019 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 2019 PC Bond shall be dated as of the date of
authentication thereof, except as otherwise provided in
Section 10 of the Original Mortgage.

The 2019 PC Bond will be issued to evidence and secure a
loan to the Company by the Commission pursuant to the
Loan Agreement of certain funds to be acquired by the
Commission through the issuance of Indiana Employment
Development Commission, Exempt Facilities Revenue Bonds,
Series 1989 (Indianapolis Power & Light Company Project)
(the "Commission Bonds"), authenticated and delivered
under and pursuant to an Indenture of Trust (the
"Commission Indenture"), dated as of August 1, 1989, by
and between the Commission and Merchants National Bank &
Trust Company of Indianapolis, as Trustee (the
"Commission Trustee").  If the Commission Trustee is
requested by any registered holder of one million dollars
or more in aggregate principal amount of the Commission
Bonds to make interest payments on the Commission Bonds
by wire transfer in federal funds on the date when due,
the interest on the 2019 PC Bond shall be paid on or
before the date when due in sufficient time and form to
permit the Commission Trustee to comply with the payment
requirements for the Commission Bonds.  Pursuant to the
Commission's pledge and assignment of the 2019 PC Bond
and the Loan Agreement, as set forth in the Commission
Indenture, the 2019 PC Bond shall be issued to the
Commission Trustee. Substantially all of the proceeds
of the Commission Bonds will be used for the Project.

Upon the notice and in the manner and with the effect
provided in this Section 2, the 2019 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 by the
     Project component shall have been damaged or destroyed as
     set forth in Section 5.1 of the Loan Agreement (i) to
     such extent that it cannot be reasonably 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 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 (as defined in the Loan
     Agreement) or 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 the
     Project component or the facilities serviced by the
     Project component 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 is thereby prevented from
     carrying on its normal operation of either the Project
     component or such facilities 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 (as defined in the
     Loan Agreement) 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 of the State of
     Indiana or the Constitution 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, 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
     Commission 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 the operation of the facilities
     serviced by the Project component shall have occurred or
     technological or other changes shall have occurred which
     render said facilities uneconomic for use.

(e)  In part, at the option of the Company, to the extent
     of Net Proceeds (as defined in the Loan Agreement)
     received from any condemnation award, taking or sale as
     stated therein, if title to, or the temporary use of any
     portion of the Project shall have been taken by 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
     Commission and the Commission Trustee a certificate of an
     Independent Engineer (as defined in the Loan Agreement)
     selected by the Company stating (i) that the property
     forming a 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 has been restored to a condition
     substantially equivalent to its condition as Pollution
     Control Facilities, Sewage Facilities or Solid Waste
     Disposal Facilities or Local District Heating or Cooling
     Facilities (as defined in the Loan Agreement) 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 Pollution Control Facilities, Sewage
     Facilities or Solid Waste Disposal Facilities or Local
     District Heating or Cooling Facilities.

(f)  In whole, at any time on or after August 1, 1999, or
     in part on any interest payment date on or after August
     1, 1999, at the option of the Company, at a price equal
     to the principal amount of the 2019 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 2019 PC Bond hereinafter
     recited, so long as the Company is not in default under the
     Loan Agreement or the 2019 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 2019 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
     Commission Trustee that (i) an event of default has
     occurred and is continuing under Section 8.01 of the
     Commission Indenture, and (ii) the Commission Trustee has
     declared the principal of all Commission Bonds then
     outstanding immediately due and payable pursuant to
     Section 8.02 of the Commission 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 2019 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 2019 PC Bond (x) such
     event of default is waived or cured as set forth in
     Section 8.02 of the Commission 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 2019 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 2019 PC Bond.

(i)  In the event the Commission Trustee notifies the
     Company and the Commission that the interest payable on
     the Commission 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 no longer excludable from
     gross income for federal income tax purposes by reason of
     a breach by the Company of any covenant, agreement or
     representation in the Loan Agreement, the Company shall
     call the 2019 PC Bond then outstanding to be redeemed on
     the next succeeding interest payment date which is not
     less than ninety (90) days after the date of such notice;
     provided, however, that such requirement of redemption
     shall be deemed waived if, prior to the date fixed for
     redemption of the 2019 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 2019 PC Bond shall be entitled only to such rights as
     are available to 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
     Commission Bonds shall still be taxable as described
     above, the Company shall have the same obligation
     (subject to the same proviso) to redeem the 2019 PC Bond
     on the next succeeding interest payment date which is not
     less than 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
     2019 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
     Commission Trustee to redeem the Commission Bonds in
     part, which redemption would have the result that the
     interest payable on the Commission 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 142(a)(2) of
     the Internal Revenue Code of 1986, as amended.

In case of redemption of the 2019 PC Bond in whole for
the purpose of prepayment under the Loan Agreement
pursuant to subsection (c), (f), (g), (h) or (i) above,
the amounts payable upon redemption of the 2019 PC Bond
shall be a sum sufficient, together with other funds
deposited with the Commission Trustee and available for
such purpose, to pay the entire principal of, (and
premium, in the case of redemption pursuant to (f)
above), and interest on the 2019 PC Bond then outstanding
and to pay all reasonable and necessary fees and expenses
of the Commission Trustee accrued and to accrue through
final payment of the 2019 PC Bond.

In case of redemption in part pursuant to (a), (b), (d),
(e), (f) or (i) above, the amount payable by the Company
under this Thirty-Third Supplemental Indenture, the Loan
Agreement and the 2019 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 2019 PC Bond so to be redeemed, which
sum together with other funds deposited with the
Commission Trustee and available for such purpose shall
be sufficient to pay the principal of, premium, if any,
and interest on the Commission Bonds and to pay all
reasonable and necessary fees and expenses of the
Commission Trustee accrued and to accrue through such
partial prepayment.  In case of redemption in part
pursuant to (a), (b), or (d) above, the aggregate
principal amount of the 2019 PC Bond to be redeemed shall
be an amount equal to the amount of the proceeds of the
Commission Bonds expended on the Project component
affected by the event, rounded up to the nearest five
thousand dollar increment.

The 2019 PC Bond and the Commission 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 2019
PC Bond in whole or in part or to comply with any
obligations to redeem the 2019 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
Commission 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 2019 PC Bond, and the requirements of
Section 59 of the Mortgage for notice by newspaper
publication shall not apply to the 2019 PC Bond.

At the option of the holder, the 2019 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 fully registered bond in like
principal amount of the same series and in an authorized
denomination.

The 2019 PC Bond will be nontransferable except to the
Commission 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 2019 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 Thirty-Third
Supplemental Indenture.

Upon redemption of the 2019 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 2019 PC Bond in
an authorized denomination and principal amount equal to
the reduced principal amount due on that series after
such partial redemption.

The Company shall not be required to transfer or exchange
the 2019 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 the 2019 PC Bond other than
for any tax or taxes or other governmental charge
required to be paid by the Company.

The 2019 PC Bond shall be limited to an aggregate
principal amount of Twenty-Three Million Five Hundred
Thousand ($23,500,000) and shall be issued under the
provisions of Article VI of the Original Mortgage.

Section 3.  The 2019 PC Bond, and the Trustee's
Certificate to be endorsed thereon, shall be in the
following forms, respectively:

[Form of Face of 2019 PC Bond]

This First Mortgage Bond, 7.45% Series, due 2019
(hereinafter called the "2019 PC Bond") is not
transferable except to a successor trustee under the
Indenture of Trust, dated as of August 1, 19889, between
the Indiana Employment Development Commission and
Merchants National Bank & Trust Company of Indianapolis,
as Trustee, or to Indianapolis Power & Light Company.

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 7.45% Series, Due 2019
     Due August 1, 2019

No. 1                                $23,500,000

INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the
State of Indiana (hereinafter called the Company), for
value received, hereby promises to pay to Merchants
National Bank & Trust Company of Indianapolis, as Trustee
under the Indenture of Trust between the Indiana
Employment Development Commission, and Merchants National
Bank & Trust Company of Indianapolis, as Trustee, dated
as of August 1, 1989, or registered assigns, on August 1,
2019, 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-Three Million Five
Hundred Thousand Dollars ($23,500,000) in lawful money of
the United States of America, and to pay to the
registered owner thereof interest thereon from the first
day of February or the first day of August next preceding
the date of this 2019 PC Bond, at the rate of seven and
forty-five hundreths per centum (7.45%) 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 2019 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.
If the Commission Trustee (as defined below) is requested
by any registered holder of one million dollars or more
in aggregate principal amount of the Commission Bonds (as
defined below) to make interest payments on the
Commission Bonds (as defined below) by wire transfer in
federal funds on the date when due, the interest on this
2019 PC Bond shall be paid on or before the date when due
in sufficient time and form to permit the Commission
Trustee (as defined below) to comply with the payment
requirements for the Commission Bonds (as defined below).

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2019
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 2019 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, at 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 2019 PC 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 2019 PC Bond]

     Trustee's Certificate

This 2019 PC Bond is one of the bonds, of the series
herein designated, provided for in the within-mentioned
Mortgage and Thirty-Third Supplemental Indenture.

                             AMERICAN NATIONAL BANK AND
                               TRUST COMPANY OF CHICAGO,
                                             Trustee

                             By______________________________________
                                Authorized Signature

[Form of Reverse Side of 2019 PC Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 7.45% Series, due 2019
     Due August 1, 2019

This 2019 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, 7.45% Series, due 2019
(hereinafter, called the "2019 PC Bond") limited in
aggregate principal amount to Twenty-Three Million Five
Hundred Thousand Dollars ($23,500,000) and established by
a Thirty-Third Supplemental Indenture, dated as of August
1, 1989, 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 2019 PC Bond evidences and secures a loan made by
the Indiana Employment Development Commission (the
"Commission"), to the Company, pursuant to a Loan
Agreement, dated as of August 1, 1989, between the
Commission and the Company (the "Loan Agreement").  In
order to obtain funds for such loan, the Commission
contemporaneously with the issue of this 2019 PC Bond,
will issue Twenty-Three Million Five Hundred Thousand
Dollars ($23,500,000) principal amount of its Exempt
Facilities Revenue Bonds, Series 1989 (Indianapolis Power
& Light Company Project)(the "Commission Bonds") under
and pursuant to an Indenture of Trust, dated as of August
1, 1989 (the "Commission Indenture") between the
Commission and Merchants National Bank & Trust Company of
Indianapolis, as Trustee (the "Commission Trustee").  The
Commission Bonds are payable from payments made by the
Company of principal, of premium, if any, and interest on
this 2019 PC Bond and from moneys in the Bond Fund
created under the Commission Indenture.  The obligation
of the Company to pay the principal of, premium, if any,
and interest on this 2019 PC Bond shall be discharged to
the extent that any moneys in said Bond Fund are
available for payments on the Commission Bonds and are
directed by the Company to be applied thereto, all as
provided in the Thirty-Third Supplemental Indenture.

This 2019 PC Bond is not subject to redemption prior to
August 1, 1999, except as provided in Section 2 of the
Thirty-Third Supplemental Indenture, to which reference
is made for full description of redemption provisions.

This 2019 PC Bond is subject to redemption in whole at
any time on or after August 1, 1999, or in part on any
interest payment date on or after August 1, 1999, at the
option of the Company, upon at least thirty (30) days
prior notice, all as provided in the Thirty-Third
Supplemental Indenture, at a price equal to the principal
amount of the 2019 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
Of July of the                Redemption
Year Stated                   Premium

2000                            2.0%
2001                            1.0%

and without premium if redeemed after July 31, 2001.

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 2019
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 2019 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-Third Supplemental Indenture, the principal
of, and premium, if any, and interest on this 2019 PC
Bond at the place, at the respective times and at the
rate and in the manner herein prescribed.

This 2019 PC Bond is issuable only in fully registered
form without coupons in denominations of Five Thousand
Dollars and any larger denomination which is a whole
multiple of Five Thousand Dollars.

This 2019 PC Bond will be nontransferable except to the
Commission 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 2019 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 the Thirty-Third
Supplemental Indenture.

Upon redemption of this 2019 PC Bond in part and
surrender thereof at the office or agency of the Company
in Chicago, Illinois, for exchange, the Trsutee shall
authenticate and deliver a new registered 2019 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 2019 PC Bond Form]

Section 4. Until the 2019 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 2019 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-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 2019 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 2019 PC Bond
     shall be discharged to the extent that any moneys in the
     Bond Fund created under and pursuant to the Commission
     Indenture are available for payment of the principal of,
     or premium, if any, or interest on the Commission Bonds
     and are directed by the Company to be applied to the
     payment thereof in the manner provided in the Commission
     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 2019 PC Bond.

(b)  Except as otherwise provided in this Section 5, the
     principal amount of any Commission Bond acquired by the
     Company and delivered to the Commission Trustee, or
     acquired by the Commission Trustee and cancelled, shall
     be credited against the obligation of the Company to pay
     the principal of the 2019 PC Bond.

As the principal of, premium, if any, and interest on the
2019 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 2019 PC
Bond.  The Trustee shall not be required to recognize any
payment made or credit availed  of with respect to any
2019 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 Commission Trustee specifying
the amount of such payment or credit and the principal
amount of the 2019 PC Bond with respect to which the
payment or credit was applied.  In the absence of receipt
by the Trustee of any 2019 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 2019 PC Bond, and the Company reserves the
right, without any consent of, or other action by, the
holders of the 2019 PC Bond, to amend, modify or delete
the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the
2019 PC Bond the holder thereof waive any right or
privilege so to consent or take any other action with
respect thereto.  Notwithstanding the foregoing, and
irrespective of its right so to do, the Company covenants
not to apply any cash in the Maintenance and Improvement
fund toward the redemption of the 2019 PC Bond prior to
August 1, 1999.

Section 7. The Company covenants that, so long as the
2019 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-Third Supplemental
Indenture or of the PC Bond issued hereunder.

Section 9. Whenever in this Thirty-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 Thirty-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 Thirty-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 Thirty-Third Supplemental Indenture or
any covenant, condition or stipulation hereof; and all
the covenants, conditions, stipulations, promises and
agreements in this Thirty-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 2019 PC Bond issued hereunder, except
as herein otherwise provided and except insofar as the
same may be inconsistent with the provisions of this
Thirty-Third Supplemental Indenture.

Section 12. This Thirty-Third Supplemental Indenture is
dated as of August 1, 1989, 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 in 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/ Marcus E. Woods
                          Marcus E. Woods,
                          Vice-President.

Attest:

/s/ Arnold A. Gordus,
Arnold A. Gordus,                                     (SEAL)
Assistant Secretary

                      American National Bank and Trust
                        Company of Chicago,

                      By  /s/ Ronald B. Bremen
                          Ronald B. Bremen,
                          Vice-President

Attest:

/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary                                     (SEAL)

State of Indiana     )
                     )  ss.:
County of Marion     )

On this 26th day of July, in the year 1989, before me, a
Notary Public in and for the County and State aforesaid,
personally came Marcus E. Woods, Vice-President, and
Arnold A. Gordus, 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 Arnold A. Gordus being by me
severally duly sworn did depose and say that the said
Marcus E. Woods resides in Hendricks County, Indiana and
the said Arnold A. Gordus resides in Marion County,
Indiana; that said Marcus E. Woods is Vice-President and
said Arnold A. Gordus 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 26th day of July, 1989.

                               /s/ Jeanne-Marie T. Bell
                              Jeanne-Marie T. Bell,
                                  Notary Public

(Notarial Seal)

My Commission Expires:
  January 19, 1993

My County of Residence is:
  Marion

State of Illinois    )
                     )  ss.:
County of Cook       )

On this 26th day of July in the year 1989, 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 26th day of July, 1989.

                                  /s/ Mary T. Denham
                                  Mary T. Denham
                                   Notary Public.
(Notarial Seal)

My Commission Expires: March 11, 1990

My County of Residence is:
  Cook

                    This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law

                     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

                     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

                       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

                       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

                      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

                    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

                      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

                       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

             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

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