EXHIBIT 10.2


              DIRECTORS AND OFFICERS LIABILITY
                      INSURANCE POLICY
                              
                THIS IS A "CLAIMS-FIRST-MADE"
        INSURANCE POLICY.  PLEASE READ IT CAREFULLY.
                              
 Words and phrases which appear in all capital letters have
                         the special
                    meanings set forth in
                  Section II - Definitions
                              
                            AEGIS
                  ASSOCIATED ELECTRIC & GAS
                 INSURANCE SERVICES LIMITED
                      HAMILTON, BERMUDA
                              
                              
                        DECLARATIONS

                                        POLICY NO. D0392A1A98

                                        DECLARATIONS NO. 1

Item 1:   This POLICY provides indemnification with respect
          to the DIRECTORS and OFFICERS of:

          IPALCO Enterprises, Inc.
          One Monument Circle
          Indianapolis, IN  46204

Item 2:   POLICY PERIOD:  from the 1st day of June, 1998, to
          the 1st day of June, 1999 both days at 12:01 A.M.
          Standard Time at the address of the COMPANY.

Item 3:   RETROACTIVE DATE:  the 4th day of December, 1970 at
          12:01 A.M. Standard Time at the address of the
          COMPANY.

Item 4:   A.   POLICY PREMIUM:     $197,950.
          B.   MINIMUM PREMIUM:    $ 79,180.

Item 5:   Limits of Liability:
          A.   $ 35,000,000   Each WRONGFUL ACT
          B.   $ 35,000,000   Aggregate Limit of Liability for the
                              POLICY PERIOD

Item 6:   UNDERLYING LIMITS:
          This POLICY is written as primary insurance

          A.   If this POLICY is written as Primary Insurance
               with respect to Insuring Agreement I(A)(2)
               only:
               (1)  $ 200,000 Each WRONGFUL ACT not arising from
                              NUCLEAR OPERATIONS
               (2)  $ 200,000 Each WRONGFUL ACT arising from
                              NUCLEAR OPERATIONS

                        DECLARATIONS
                          continued

                                        POLICY NO. D0392A1A98

                                        DECLARATIONS NO. 1


          B.   If this POLICY is written as Excess Insurance:
               (1)  (a) $ ________ Each WRONGFUL ACT
                    (b) $ ________ In the Aggregate for all WRONGFUL ACTS
               (2)      $ ________ Each WRONGFUL ACT not covered
                                   under Underlying Insurance
               (3)  In the Event of Exhaustion of the
                    UNDERLYING LIMIT stated in Item
                    6(B)(1)(b) above with respect to Insuring
                    Agreement I(A)(2) only:
                    (a) $ ________ Each WRONGFUL ACT not
                                   arising from NUCLEAR
                                   OPERATIONS
                    (b) $ ________ Each WRONGFUL ACT arising from
                                   NUCLEAR OPERATIONS

Item 7:   Any notice to be provided or any payment to be made
          hereunder to the COMPANY shall be made to:

          NAME           Mr. Bruce H. Smith
          TITLE          Admin. Benefits & Risk Mgmt.
          ENTITY         Indianapolis Power & Light Company
          ADDRESS        One Monument Circle
                         P.O. Box 1595 (Zip 46206-1595)
                         Indianapolis, IN  46204

Item 8:   Any notice to be provided or any payment to be made
          hereunder to the INSURER shall be made to:

          NAME           AEGIS Insurance Services, Inc.
          ADDRESS        10 Exchange Place
                         Jersey City, New Jersey 07302

ENDORSEMENTS ATTACHED AT POLICY ISSUANCE:  1-5



Countersigned at Jersey City, New Jersey

On July 14, 1998

AEGIS Insurance Services, Inc.


By  /s/  Brian Madden
     Authorized Representative

     POLICY OF DIRECTORS AND OFFICERS LIABILITY INSURANCE EFFECTED
       WITH ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
                          HAMILTON, BERMUDA
              (hereinafter referred to as the "POLICY")
                              
           THIS IS A "CLAIMS-FIRST-MADE" INSURANCE POLICY.
                      PLEASE READ IT CAREFULLY.
                              
       Words and phrases which appear in all capital letters
              have the special meanings set forth in
                       Section II - Definitions.

In consideration of the payment of premium, and in reliance
upon all statements made and information furnished to
Associated Electric & Gas Insurance Services Limited
(hereinafter referred to as the "INSURER") by the Application
attached hereto which is hereby made a part hereof, and
subject to all the terms hereinafter provided, the INSURER
agrees as follows:

I.   INSURING AGREEMENT

     (A)  Indemnity

          (1)  The INSURER shall pay on behalf of the
               DIRECTORS and OFFICERS any and all sums which
               they shall become legally obligated to pay as
               ULTIMATE NET LOSS for which the COMPANY has
               not provided reimbursement, by reason of any
               WRONGFUL ACT which takes place during the
               COVERAGE PERIOD and is actually or allegedly
               caused, committed or attempted by the
               DIRECTORS or OFFICERS while acting in their
               respective capacities as DIRECTORS or
               OFFICERS, provided such ULTIMATE NET LOSS
               arises from a CLAIM first made against the
               DIRECTORS or OFFICERS during the POLICY PERIOD
               or during the DISCOVERY PERIOD, if purchased.

          (2)  The INSURER shall pay on behalf of the COMPANY any
               and all sums it has incurred, as required or permitted
               by applicable common or statutory law or under provisions
               of the COMPANY's Charter or Bylaws effected pursuant to
               such law, as ULTIMATE NET LOSS, to indemnify DIRECTORS or
               OFFICERS for ULTIMATE NET LOSS which they are legally
               obligated to pay by reason of any WRONGFUL ACT which
               takes place during the COVERAGE PERIOD and is actually
               or allegedly caused, committed or attempted by such
               DIRECTORS or OFFICERS while acting in their respective
               capacities as DIRECTORS or OFFICERS, provided the ULTIMATE
               NET LOSS arises from a CLAIM first made against the
               DIRECTORS or OFFICERS during the POLICY PERIOD or during
               the DISCOVERY PERIOD, if purchased.
          
      (B) Limits of Liability

          (1)  The INSURER shall only be liable hereunder for
               the amount of ULTIMATE NET LOSS in excess of
               the UNDERLYING LIMITS as stated in Item 6 of
               the Declarations as a result of each WRONGFUL
               ACT covered under Insuring Agreement I(A)(1)
               or I(A)(2) or both, and then only up to the
               Limit of Liability stated in Item 5A of the
               Declarations and further subject to the
               aggregate Limit of Liability stated in Item 5B
               of the Declarations as the maximum amount
               payable hereunder in the aggregate for all
               CLAIMS first made against the DIRECTORS or
               OFFICERS during both:

               (a)  the POLICY PERIOD and

               (b)  the DISCOVERY PERIOD, if purchased.

               Notwithstanding the foregoing, in the event
               that the INSURER cancels or refuses to renew
               this POLICY, and a DISCOVERY PERIOD extension
               is purchased by the COMPANY, then the
               aggregate Limit of Liability stated in Item 5B
               of the Declarations shall be reinstated but
               only with respect to CLAIMS first made against
               the DIRECTORS or OFFICERS during such
               DISCOVERY PERIOD.
          
          (2)  Multiple CLAIMS arising out of the same
               WRONGFUL ACT, even if made against different
               DIRECTORS or OFFICERS, shall be deemed to be a
               single CLAIM arising from a single WRONGFUL
               ACT and to have been reported during the
               POLICY PERIOD or, if purchased, during the
               DISCOVERY PERIOD in which the first of such
               multiple CLAIMS is made against any of the
               DIRECTORS or OFFICERS.  The Limits of
               Liability and UNDERLYING LIMITS, stated in
               Items 5 and 6 of the Declarations
               respectively, shall apply only once regardless
               of the number of CLAIMS arising out of the
               same WRONGFUL ACT. All interrelated acts shall
               be deemed to be a single WRONGFUL ACT.

          (3)  The inclusion herein of more than one DIRECTOR
               or OFFICER, or the application of both
               Insuring Agreements I(A)(1) and I(A)(2), shall
               not operate to increase the INSURER'S Limits
               of Liability as stated in Item 5 of the
               Declarations.

          (4)  With respect to ULTIMATE NET LOSS arising out
               of any WRONGFUL ACT in connection with service
               for a NOT-FOR-PROFIT ORGANIZATION as provided
               in Section II(E)(2), if:

               (a)  such WRONGFUL ACT results in liability
                    being imposed upon one or more DIRECTORS
                    and OFFICERS under this POLICY and also
                    upon directors and officers and general
                    partners under any other directors and
                    officers or general partner liability
                    insurance policies issued by the INSURER
                    to any organization; and

               (b)  the total of the ULTIMATE NET LOSS under
                    this POLICY and the ultimate net loss
                    under such other policies issued by the
                    INSURER equals or exceeds $35,000,000;

               the maximum amount payable by the INSURER
               under this POLICY in the aggregate for all
               ULTIMATE NET LOSS resulting from such WRONGFUL
               ACT shall be the lesser of the applicable
               Limit of Liability provided by this POLICY or
               the product of:

                     (i) the applicable Limit of Liability
                         provided by this POLICY divided by
                         the total limits of liability per
                         wrongful act applicable to such
                         wrongful act under all policies
                         issued by the INSURER; and

                    (ii) $35,000,000.

               If the amount paid under this POLICY with
               respect to such WRONGFUL ACT exceeds the
               COMPANY'S proportionate share of the
               $35,000,000 as determined above, the COMPANY
               shall refund such excess to the INSURER
               promptly.

     (C)  UNDERLYING LIMITS

          (1)  If this POLICY is written as Primary Insurance
               with respect to Insuring Agreement I(A)(2),
               the UNDERLYING LIMIT for the COMPANY for each
               WRONGFUL ACT shall be as stated in Item 6A(1)
               of the Declarations, unless it is based upon,
               arises out of or is attributable to NUCLEAR
               OPERATIONS, in which event it shall be as
               stated in Item 6A(2) of the Declarations;

          (2)  If this POLICY is written as Excess Insurance:

               (a)  with respect to Insuring Agreements
                    I(A)(1) and I(A)(2), the UNDERLYING LIMIT
                    for each WRONGFUL ACT shall be as stated
                    in Item 6B(1)(a) of the Declarations and
                    the maximum UNDERLYING LIMIT for all
                    WRONGFUL ACTS shall be as stated in Item
                    6B(1)(b) of the Declarations;

               (b)  with respect to ULTIMATE NET LOSS covered
                    hereunder:

                     (i) in the event of reduction of the
                         underlying aggregate limit as stated
                         in Item 6B(1)(b), the UNDERLYING
                         LIMIT shall be such reduced
                         underlying aggregate limit; or

                    (ii) in the event of exhaustion of the
                         underlying aggregate limit as stated
                         in Item 6B(1)(b), the UNDERLYING
                         LIMIT shall be as stated in Item
                         6B(3) of the Declarations;

               (c)  with respect to any WRONGFUL ACT covered
                    hereunder but not covered under such
                    Underlying Insurance, the UNDERLYING
                    LIMIT shall be as stated in Item 6B(2) of
                    the Declarations; and

               (d)  nothing herein shall make this POLICY
                    subject to the terms and conditions of
                    any Underlying Insurance.

          (3)  Only payment of indemnity or defense expenses
               which, except for the amount thereof, would
               have been indemnifiable under this POLICY, may
               reduce or exhaust an UNDERLYING LIMIT.

          (4)  In the event that both Insuring Agreement
               I(A)(1) and I(A)(2) are applicable to
               INDEMNITY and DEFENSE COST resulting from a
               WRONGFUL ACT then:

               (a)  if this POLICY is written as Primary
                    Insurance, the UNDERLYING LIMIT
                    applicable to such WRONGFUL ACT shall be
                    the UNDERLYING LIMIT stated in Item 6A of
                    the Declarations; and

               (b)  if this POLICY is written as Excess
                    Insurance and the UNDERLYING LIMIT has
                    been exhausted, the UNDERLYING LIMIT
                    applicable to such WRONGFUL ACT shall be
                    the UNDERLYING LIMIT stated in Item
                    6B(3);

               and there shall be no UNDERLYING LIMIT
               applicable with respect to coverage provided
               under Insuring Agreement I(A)(1).

          (5)  The UNDERLYING LIMITS stated in Item 6 of the
               Declarations applicable to Insuring Agreement
               I(A)(2) shall apply to all INDEMNITY and/or
               DEFENSE COST for which indemnification of the
               DIRECTORS and/or OFFICERS by the COMPANY is
               legally permissible, whether or not such
               indemnification is granted by the COMPANY.

II.  DEFINITIONS

     A.   CLAIM:  The term "CLAIM" shall mean:

          (1)  any demand, suit or proceeding against any
               DIRECTORS and/or OFFICERS during the POLICY
               PERIOD or during the DISCOVERY PERIOD, if
               purchased, which seeks actual monetary damages
               or other relief and which may result in any
               DIRECTORS and/or OFFICERS becoming legally
               obligated to pay ULTIMATE NET LOSS by reason
               of any WRONGFUL ACT actually or allegedly
               caused, committed or attempted during the
               COVERAGE PERIOD by the DIRECTORS and/or
               OFFICERS while acting in their capacity as
               such; or

          (2)  written notice to the INSURER during the
               POLICY PERIOD or during the DISCOVERY PERIOD,
               if purchased, by the DIRECTORS, OFFICERS
               and/or the COMPANY, describing with the
               specificity set forth in Condition (C) hereof,
               circumstances of which they are aware
               involving an identifiable WRONGFUL ACT
               actually or allegedly caused, committed or
               attempted during the COVERAGE PERIOD by the
               DIRECTORS and/or OFFICERS while acting in
               their capacity as such, which circumstances
               are likely to give rise to a demand, suit or
               proceeding being made against such DIRECTORS
               and/or OFFICERS.

               A CLAIM shall be deemed to be first made
               against a DIRECTOR or OFFICER at the earlier
               of the time at which a demand, suit or
               proceeding is first made against the DIRECTOR
               or OFFICER, as set forth in section (1) of
               this Definition or the time at which written
               notice is given to the INSURER, as set forth
               in section (2) of this Definition.

               Multiple demands or suits arising out of the
               same WRONGFUL ACT or interrelated acts shall
               be deemed to be a single "CLAIM".

     (B)  COMPANY:  The term "COMPANY" shall mean the
          organization(s) named in Item 1 of the Declarations
          and, subject to Condition (A) hereof, any
          SUBSIDIARIES of such organization(s).

     (C)  COVERAGE PERIOD:  The term "COVERAGE PERIOD" shall
          mean the period of time from the RETROACTIVE DATE
          to the termination of the POLICY PERIOD.

     (D)  DEFENSE COST:  The term "DEFENSE COST" shall mean
          all expense incurred by or on behalf of the
          DIRECTORS, OFFICERS or, where reimbursable under
          Insuring Agreement I(A)(2), the COMPANY in the
          investigation, negotiation, settlement and defense
          of any CLAIM except all salaries, wages and benefit
          expenses of DIRECTORS, OFFICERS, or the COMPANY.

     (E)  DIRECTOR and OFFICER:  The terms "DIRECTOR" and
          "OFFICER" as used herein, either in the singular or
          plural, shall mean:

          (1)  any person who was, is now, or shall be a
               director, officer or trustee of the COMPANY
               and any other employee of the COMPANY who may
               be acting in the capacity of a director,
               officer or trustee of the COMPANY with the
               express authorization of a director, officer
               or trustee of the COMPANY;

          (2)  any director, officer or trustee of the
               COMPANY who is serving or has served at the
               specific request of the COMPANY as a director,
               officer or trustee of any outside NOT-FOR-
               PROFIT ORGANIZATION; or

          (3)  the estates, heirs, legal representatives or
               assigns of deceased persons who were
               directors, officers or trustees of the COMPANY
               at the time the WRONGFUL ACTS upon which such
               CLAIMS were based were committed, and the
               legal representatives or assigns of directors,
               officers or trustees of the COMPANY in the
               event of their incompetency, insolvency or
               bankruptcy;

          provided, however, that the terms "DIRECTOR" and
          "OFFICER" shall not include a trustee appointed
          pursuant to Title 11, United States Code, or
          pursuant to the Securities Investor Protection Act,
          a receiver appointed for the benefit of creditors
          by Federal or State courts, an assignee for the
          benefit of creditors or similar fiduciary appointed
          under Federal or State laws for the protection of
          creditors or the relief of debtors.

          In the event that a CLAIM which is within the
          coverage afforded under this POLICY is made against
          any DIRECTOR or OFFICER and such CLAIM includes a
          claim against the lawful spouse of such DIRECTOR or
          OFFICER solely by reason of (a) such spousal status
          or (b) such spouse's ownership interest in property
          or assets which are sought as recovery for WRONGFUL
          ACTS of a DIRECTOR or OFFICER, such spouse shall be
          deemed to be a DIRECTOR or OFFICER hereunder, but
          solely with respect to such claim.  In no event,
          however, shall the lawful spouse of a DIRECTOR or
          OFFICER be deemed to be a DIRECTOR or OFFICER as
          regards any CLAIM in respect of which there is a
          breach of duty, neglect, error, misstatement,
          misleading statement or omission actually or
          allegedly caused, committed or attempted by or
          claimed against such spouse, acting individually or
          in his or her capacity as the spouse of a DIRECTOR
          or OFFICER.

     (F)  DISCOVERY PERIOD:  The term "DISCOVERY PERIOD"
          shall mean the period of time set forth in
          Condition (L).

     (G)  INDEMNITY:  The term "INDEMNITY" shall mean all
          sums which the DIRECTORS, OFFICERS or, where
          reimbursable under Insuring Agreement I(A)(2), the
          COMPANY shall become legally obligated to pay as
          damages either by adjudication or compromise with
          the consent of the INSURER, after making proper
          deduction for the UNDERLYING LIMITS and all
          recoveries, salvages and other valid and
          collectible insurance.

     (H)  INSURER:  The term "INSURER" shall mean Associated
          Electric & Gas Insurance Services Limited,
          Hamilton, Bermuda, a non-assessable mutual
          insurance company.

     (I)  NOT-FOR-PROFIT ORGANIZATION:  The term "NOT-FOR-
          PROFIT ORGANIZATION" shall mean:

          (1)  an organization, no part of the income or
               assets of which is distributable to its
               owners, stockholders or members and which is
               formed and operated for a purpose other than
               the pecuniary profit or financial gain of its
               owners, stockholders or members; or

          (2)  a political action committee which is defined
               for these purposes as a separate segregated
               fund to be utilized for political purposes as
               described in the United States Federal
               Election Campaign Act (2 U.S.C. 441b(2)(C)).

     (J)  NUCLEAR OPERATIONS:  The term "NUCLEAR OPERATIONS"
          shall mean the design, engineering, financing,
          construction, operation, maintenance, use,
          ownership, conversion or decommissioning of any
          nuclear facility.

     (K)  POLICY:  The term "POLICY" shall mean this
          insurance policy, including the Application, the
          Declarations and any endorsements issued by the
          INSURER to the organization first named in Item 1
          of the Declarations for the POLICY PERIOD listed in
          Item 2 of the Declarations.

     (L)  POLICY PERIOD:  The term "POLICY PERIOD" shall mean
          the period of time stated in Item 2 of the
          Declarations.

     (M)  RETROACTIVE DATE:  The term "RETROACTIVE DATE"
          shall mean the date stated in Item 3 of the
          Declarations; provided, however, with respect to
          any WRONGFUL ACT actually or allegedly caused,
          committed or attempted by the DIRECTORS or OFFICERS
          of any SUBSIDIARY formed or acquired by the COMPANY
          or any of its SUBSIDIARIES after inception of the
          POLICY PERIOD of this POLICY, or after inception of
          any other policy issued by the INSURER to the
          COMPANY for a prior policy period, the term
          "RETROACTIVE DATE" shall mean the date of such
          formation or acquisition.

     (N)  SUBSIDIARIES:  The term "SUBSIDIARY" shall mean any
          entity more than fifty percent (50%) of whose
          outstanding securities or financial interest
          representing the present right to vote for election
          of directors (or the appointment of a general
          partner in respect of a limited partnership or
          manager in respect of a limited liability company)
          are owned by the COMPANY and/or one or more of its
          "SUBSIDIARIES".

     (O)  ULTIMATE NET LOSS:  The term "ULTIMATE NET LOSS"
          shall mean the total INDEMNITY and DEFENSE COST
          with respect to each WRONGFUL ACT to which this
          POLICY applies, provided that ULTIMATE NET LOSS
          does not include any amount allocated, pursuant to
          Condition (T), to CLAIMS against persons or
          entities other than DIRECTORS and OFFICERS or to
          non-covered matters.

     (P)  UNDERLYING LIMITS:  The term "UNDERLYING LIMITS"
          shall mean the amounts stated in Item 6 of the
          Declarations.

     (Q)  WRONGFUL ACT:  The term "WRONGFUL ACT" shall mean
          any actual or alleged breach of duty, neglect,
          error, misstatement, misleading statement or
          omission actually or allegedly caused, committed or
          attempted by any DIRECTOR or OFFICER while acting
          individually or collectively in their capacity as
          such, or claimed against them solely by reason of
          their being DIRECTORS or OFFICERS.

          All such interrelated breaches of duty, neglects,
          errors, misstatements, misleading statements or
          omissions actually or allegedly caused, committed
          or attempted by or claimed against one or more of
          the DIRECTORS or OFFICERS shall be deemed to be a
          single "WRONGFUL ACT".

III. EXCLUSIONS

     The INSURER shall not be liable to make any payment for
     ULTIMATE NET LOSS arising from any CLAIM(S) made against
     any DIRECTOR or OFFICER:

     (A)  (1)  for any fines or penalties imposed in a
               criminal suit, action or proceeding;

          (2)  for any fines or penalties imposed in
               conjunction with political contributions,
               payments, commissions or gratuities; or

          (3)  for any other fines or penalties imposed by
               final adjudication of a court of competent
               jurisdiction or any agency or commission
               possessing quasi-judicial authority; or

          (4)  where, at inception of the POLICY PERIOD, such
               DIRECTOR or OFFICER had knowledge of a fact or
               circumstance which was likely to give rise to
               such CLAIM(S) and which such DIRECTOR or
               OFFICER failed to disclose or misrepresented
               in the Application or in the process of
               preparation of the Application, other than in
               a Renewal Application; provided, however, that
               this exclusion shall not apply to such
               CLAIM(S) made against any DIRECTOR or OFFICER
               other than such DIRECTOR or OFFICER who failed
               to disclose or misrepresented such fact or
               circumstance; provided further that this
               exclusion shall not limit the INSURER'S right
               to exercise any remedy available to it with
               respect to such failure to disclose or
               misrepresentation other than the remedy
               provided for in this Exclusion.

     (B)  with respect to Insuring Agreement I(A)(1) only:

          (1)  based upon, arising out of or attributable to
               such DIRECTOR or OFFICER having gained any
               personal profit, advantage or remuneration to
               which such DIRECTOR or OFFICER was not legally
               entitled if:

               (a)  a judgment or other final adjudication
                    adverse to such DIRECTOR or OFFICER
                    establishes that he in fact gained such
                    personal profit, advantage or
                    remuneration; or

               (b)  such DIRECTOR or OFFICER has entered into
                    a settlement agreement to repay such
                    personal profit, advantage or
                    remuneration to the COMPANY;

          (2)  for an accounting of profits made from the
               purchase or sale by such DIRECTOR or OFFICER
               of securities of the COMPANY within the
               meaning of Section 16(b) of the Securities
               Exchange Act of 1934 and amendments thereto or
               similar provisions of any other federal or
               state statutory or common law;

          (3)  brought about or contributed to by the
               dishonest, fraudulent, criminal or malicious
               act or omission of such DIRECTOR or OFFICER if
               a final adjudication establishes that acts of
               active and deliberate dishonesty were
               committed or attempted with actual dishonest
               purpose and intent and were material to the
               cause of action so adjudicated; or

          (4)  where such payment would be contrary to
               applicable law.

     (C)  for bodily injury, mental anguish, mental illness,
          emotional upset, sickness or disease sustained by
          any person, death of any person or for physical
          injury to or destruction of tangible property or
          the loss of use thereof.

     (D)  for injury based upon, arising out of or
          attributable to:

          (1)  false arrest, wrongful detention or wrongful
               imprisonment or malicious prosecution;

          (2)  wrongful entry, wrongful eviction or other
               invasion of the right of private occupancy;

          (3)  discrimination or sexual harassment;

          (4)  publication or utterance:

               (a)  of a libel or slander or other defamatory
                    or disparaging material; and

               (b)  in violation of an individual's right of
                    privacy; or

          (5)  with respect to the COMPANY'S advertising
               activities:  piracy, plagiarism, unfair
               competition, idea misappropriation under
               implied contract, or infringement of
               copyright, title, slogan, registered
               trademark, service mark, or trade name.

     (E)  for violation(s) of any responsibility, obligation
          or duty imposed upon fiduciaries by the Employee
          Retirement Income Security Act of 1974 or
          amendments thereto or by similar common or
          statutory law of the United States of America or
          any state or other jurisdiction therein.

     (F)  based upon, arising out of or attributable to:

          (1)  the rendering of advice with respect to;

          (2)  the interpreting of; or

          (3)  the handling of records in connection with the
               enrollment, termination or cancellation of
               employees under the COMPANY'S group life
               insurance, group accident or health insurance,
               pension plans, employee stock subscription
               plans, workers' compensation, unemployment
               insurance, social security, disability
               benefits and any other employee benefit
               programs.

     (G)  based upon, arising out of or attributable to any
          failure or omission on the part of the DIRECTORS,
          OFFICERS and/or the COMPANY to effect and maintain
          insurance(s) of the type and amount which is
          customary with companies in the same or similar
          business.

     (H)  (1)  arising from any circumstances, written
               notice of which has been given under "any
               policy" or any discovery period thereof, which
               policy expired prior to or upon the inception
               of this POLICY; or

          (2)  which is one of a number of CLAIMS arising out
               of the same WRONGFUL ACT, if any CLAIM of such
               multiple CLAIMS was made against the DIRECTORS
               or OFFICERS during "any policy" or any
               discovery period thereof, which policy expired
               prior to or upon the inception of this POLICY.

          The term "any policy" refers to any Directors and
          Officers Liability Insurance Policy, any General
          Partners Liability Insurance Policy or any other
          policy affording substantially similar coverage
          (whether issued by the INSURER or any other
          carrier).

     (I)  if any other policy or policies also afford(s)
          coverage in whole or in part for such CLAIM(S);
          except, this exclusion shall not apply:

          (1)  to the amount of ULTIMATE NET LOSS with
               respect to such CLAIM(S) which is in excess of
               the limit of liability of such other policy or
               policies and any applicable deductible or
               retention thereunder; or

          (2)  with respect to coverage afforded such
               CLAIM(S) by any other policy or policies
               purchased or issued specifically as insurance
               underlying or in excess of the coverage
               afforded under this POLICY;

          provided always that nothing herein shall be
          construed to cause this POLICY to contribute with
          any other policy or policies or to make this POLICY
          subject to any of the terms of any other policy or
          policies.

     (J)  for any WRONGFUL ACT which took place in whole or
          in part prior to the RETROACTIVE DATE.

     (K)  by, on behalf of, in the right of, at the request
          of, or for the benefit of, any security holder of
          the COMPANY, any DIRECTOR or OFFICER, or the
          COMPANY, unless such CLAIM is:

          (1)  made derivatively by any shareholder of the
               COMPANY for the benefit of the COMPANY and
               such shareholder is:

               (a)  acting totally independent of, and
                    totally without the suggestion,
                    solicitation, direction, assistance,
                    participation or intervention of, any
                    DIRECTOR or OFFICER, or the COMPANY; and

               (b)  not any entity within the definition of
                    the term "COMPANY"; or

          (2)  made non-derivatively by a security holder who
               is not:

               (a)  a DIRECTOR or OFFICER; or

               (b)  any entity within the definition of the
                    term "COMPANY"; or

          (3)  made non-derivatively by an OFFICER acting
               totally independent of, and totally without
               the suggestion, solicitation, direction,
               assistance, participation or intervention of,
               any other DIRECTOR or OFFICER, or the COMPANY,
               and (subject to all the other exclusions and
               POLICY provisions) arising from the wrongful
               termination of that OFFICER.

     (L)  where such CLAIM(S) arise  out of such DIRECTOR'S
          or OFFICER'S activities as a director, officer or
          trustee of any entity other than:

          (1)  the COMPANY; or

          (2)  any outside NOT-FOR-PROFIT ORGANIZATION as
               provided in Section II(E)(2).

IV.  CONDITIONS

     (A)  Acquisition, Merger and Dissolution

          (1)  (a)  If, after inception of the POLICY PERIOD,

                    (i)  the COMPANY or any of its
                         SUBSIDIARIES forms or acquires any
                         SUBSIDIARY or acquires any entity by
                         merger into or consolidation with
                         the COMPANY or any SUBSIDIARY, and

                    (ii) the operations of such formed or
                         acquired entity are related to,
                         arising from or associated with the
                         production, transmission, delivery
                         or furnishing of electricity, gas,
                         water or sewer service to the public
                         or the conveyance of telephone
                         messages for the public; and

                   (iii) the total assets of such formed
                         or acquired entity are not greater
                         than the lesser of $100,000,000 or
                         ten percent (10%) of the COMPANY'S
                         total assets,

                    coverage shall be provided for the
                    DIRECTORS and OFFICERS of such entity
                    from the date of formation, acquisition,
                    merger or consolidation, respectively,
                    but only with respect to WRONGFUL ACTS
                    actually or allegedly caused, committed
                    or attempted during that part of the
                    POLICY PERIOD which is subsequent to the
                    formation, acquisition, merger or
                    consolidation.

               (b)  In respect of any SUBSIDIARY formed or
                    acquired after the inception of the
                    POLICY PERIOD and not subject to
                    paragraph (a) above, or of any entity
                    acquired by merger into or consolidation
                    with the COMPANY or any SUBSIDIARY after
                    the inception of the POLICY PERIOD and
                    not subject to paragraph (a) above, the
                    COMPANY shall report such formation or
                    acquisition within ninety (90) days
                    thereafter and, if so reported, upon
                    payment of an additional premium and upon
                    terms as may be required by the INSURER,
                    such coverage shall be provided for the
                    DIRECTORS and OFFICERS of such newly
                    formed or acquired SUBSIDIARY or merged
                    or consolidated entity, but only with
                    respect to WRONGFUL ACTS actually or
                    allegedly caused, committed, or attempted
                    during that part of the COVERAGE PERIOD
                    which is subsequent to such acquisition,
                    merger or consolidation.

          (2)  If, prior to or after inception of the POLICY
               PERIOD, the COMPANY or any of its SUBSIDIARIES
               is or has been acquired by or merged into any
               other entity, or is or has been dissolved,
               coverage under this POLICY shall continue for
               the POLICY PERIOD but only for DIRECTORS and
               OFFICERS of the COMPANY or its SUBSIDIARIES
               who were serving as such prior to such
               acquisition, merger or dissolution and only
               with respect to WRONGFUL ACTS actually or
               allegedly caused, committed or attempted
               during that part of the COVERAGE PERIOD which
               is prior to such acquisition, merger or
               dissolution.

     (B)  Non-Duplication of Limits

          To avoid the duplication of the INSURER'S Limits of
          Liability stated in Item 5 of the Declarations, the
          DIRECTORS, OFFICERS and COMPANY agree that:

          (1)  in the event the INSURER provides INDEMNITY or
               DEFENSE COSTS for any WRONGFUL ACT under this
               POLICY, neither the DIRECTORS, OFFICERS nor
               the COMPANY shall have any right to additional
               INDEMNITY or DEFENSE COSTS for such WRONGFUL
               ACT under any other policy issued by the
               INSURER to the DIRECTORS, OFFICERS or COMPANY
               that otherwise would apply to such WRONGFUL
               ACT; and

          (2)  in the event the INSURER provides INDEMNITY or
               DEFENSE COSTS for any WRONGFUL ACT under any
               other policy issued by the INSURER to the
               DIRECTORS, OFFICERS, or COMPANY, neither the
               DIRECTORS, OFFICERS nor the COMPANY shall have
               any right to additional INDEMNITY or DEFENSE
               COSTS for such WRONGFUL ACT under this POLICY.

     (C)  Notice of Claim

          As a condition precedent to any rights under this
          POLICY, the DIRECTORS, OFFICERS and/or the COMPANY,
          shall give written notice to the INSURER as soon as
          practicable of any CLAIM, which notice shall
          include the nature of the WRONGFUL ACT, the alleged
          injury, the names of the claimants, and the manner
          in which the DIRECTOR, OFFICER or COMPANY first
          became aware of the CLAIM, and shall cooperate with
          the INSURER and give such additional information as
          the INSURER may reasonably require.

          The Application or any information contained
          therein for this POLICY shall not constitute a
          notice of CLAIM.

     (D)  Cooperation and Settlements

          In the event of any WRONGFUL ACT which may involve
          this POLICY, the DIRECTORS, OFFICERS or COMPANY
          without prejudice as to liability, may proceed
          immediately with settlements which in their
          aggregate do not exceed the UNDERLYING LIMITS. The
          COMPANY shall notify the INSURER of any such
          settlements made.

          The INSURER shall not be called upon to assume
          charge of the investigation, settlement or defense
          of any demand, suit or proceeding, but the INSURER
          shall have the right and shall be given the
          opportunity to associate with the DIRECTORS,
          OFFICERS and COMPANY or any underlying insurer, or
          both, in the investigation, settlement, defense and
          control of any demand, suit or proceeding relative
          to any WRONGFUL ACT where the demand, suit or
          proceeding involves or may involve the INSURER.  At
          all times, the DIRECTORS, OFFICERS and COMPANY and
          the INSURER shall cooperate in the investigation,
          settlement and defense of such demand, suit or
          proceeding.

          The DIRECTORS, OFFICERS and COMPANY and their
          underlying insurer(s) shall, at all times, use
          diligence and prudence in the investigation,
          settlement and defense of demands, suits or other
          proceedings.

     (E)  Appeals

          In the event that the DIRECTORS, OFFICERS, COMPANY
          or any underlying insurer elects not to appeal a
          judgment in excess of the UNDERLYING LIMITS, the
          INSURER may elect to conduct such appeal at its own
          cost and expense and shall be liable for any
          taxable court costs and interest incidental
          thereto, but in no event shall the total liability
          of the INSURER, exclusive of the cost and expense
          of appeal, exceed its Limits of Liability stated in
          Item 5 of the Declarations.

     (F)  Subrogation

          In the event of any payment under this POLICY, the
          INSURER shall be subrogated to the extent of such
          payment to all rights of recovery thereof, and the
          DIRECTORS, OFFICERS and COMPANY shall execute all
          papers required and shall do everything that may be
          necessary to enable the INSURER to bring suit in
          the name of the DIRECTORS, OFFICERS or COMPANY.

     (G)  Bankruptcy or Insolvency

          Bankruptcy or insolvency of the COMPANY shall not
          relieve the INSURER of any of its obligations
          hereunder.

          In the event of bankruptcy or insolvency of the
          COMPANY, subject to all the terms of this POLICY,
          the INSURER shall pay on behalf of the DIRECTORS
          and OFFICERS under Insuring Agreement I(A)(1) (in
          excess of the UNDERLYING LIMITS, if any, applicable
          to Insuring Agreement I(A)(1)) for ULTIMATE NET
          LOSS they shall become legally obligated to pay
          which would have been indemnified by the COMPANY
          and reimbursable by the INSURER under Insuring
          Agreement I(A)(2) but for such bankruptcy or
          insolvency; provided, however, that the INSURER
          shall be subrogated, to the extent of any payment,
          to the rights of the DIRECTORS and OFFICERS to
          receive indemnification from the COMPANY but only
          up to the amount of the UNDERLYING LIMITS
          applicable to Insuring Agreement I(A)(2) less the
          amount of the UNDERLYING LIMITS, if any, applicable
          to Insuring Agreement I(A)(1).

     (H)  Uncollectibility of Underlying Insurance

          Notwithstanding any of the terms of this POLICY
          which might be construed otherwise, if this POLICY
          is written as excess over any Underlying Insurance,
          it shall drop down only in the event of reduction
          or exhaustion of any aggregate limits contained in
          such Underlying Insurance and shall not drop down
          for any other reason including, but not limited to,
          uncollectibility (in whole or in part) because of
          the financial impairment or insolvency of an
          underlying insurer. The risk of uncollectibility of
          such Underlying Insurance (in whole or in part)
          whether because of financial impairment or
          insolvency of an underlying insurer or for any
          other reason, is expressly retained by the
          DIRECTORS, OFFICERS and the COMPANY and is not in
          any way or under any circumstances insured or
          assumed by the INSURER.

     (I)  Maintenance of UNDERLYING LIMITS

          If this POLICY is written as Excess Insurance, it
          is a condition of this POLICY that any UNDERLYING
          LIMITS stated in Item 6 of the Declarations shall
          be maintained in full force and effect, except for
          reduction or exhaustion of any underlying aggregate
          limits of liability, during the currency of this
          POLICY.  Failure of the COMPANY to comply with the
          foregoing shall not invalidate this POLICY but in
          the event of such failure, without the agreement of
          the INSURER, the INSURER shall only be liable to
          the same extent as it would have been had the
          COMPANY complied with this Condition.

     (J)  Changes and Assignment

          The terms of this POLICY shall not be waived or
          changed, nor shall an assignment of interest be
          binding, except by an endorsement to this POLICY
          issued by the INSURER.

     (K)  Outside NOT-FOR-PROFIT ORGANIZATION

          If any DIRECTOR or OFFICER is serving or has served
          at the specific request of the COMPANY as a
          DIRECTOR or OFFICER of an outside NOT-FOR-PROFIT
          ORGANIZATION, the coverage afforded by this POLICY:

          (1)  shall be specifically excess of any other
               indemnity or insurance available to such
               DIRECTOR or OFFICER by reason of such service;
               and

          (2)  shall not be construed to extend to the
               outside NOT-FOR-PROFIT ORGANIZATION in which
               the DIRECTOR or OFFICER is serving or has
               served, nor to any other director, officer or
               employee of such outside NOT-FOR-PROFIT
               ORGANIZATION.

     (L)  DISCOVERY PERIOD

          (1)  In the event of cancellation or nonrenewal of
               this POLICY by the INSURER, the COMPANY shall
               have the right, upon execution of a warranty
               that all known CLAIMS and facts or
               circumstances likely to give rise to a CLAIM
               have been reported to the INSURER and payment
               of an additional premium to be determined by
               the INSURER which shall not exceed two hundred
               percent (200%) of the Policy Premium stated in
               Item 4 of the Declarations, to an extension of
               the coverage afforded by this POLICY with
               respect to any CLAIM first made against any
               DIRECTOR or OFFICER during the period of
               twelve (12) months after the effective date of
               such cancellation or nonrenewal, but only with
               respect to any WRONGFUL ACT committed during
               the COVERAGE PERIOD. This right of extension
               shall terminate unless written notice of such
               election is received by the INSURER within
               thirty (30) days after the effective date of
               cancellation or nonrenewal.

               The offer by the INSURER of renewal on terms,
               conditions or premiums different from those in
               effect during the POLICY PERIOD shall not
               constitute cancellation or refusal to renew
               this POLICY.

          (2)  In the event of cancellation or nonrenewal of
               this POLICY by the COMPANY, the COMPANY shall
               have the right upon payment of an additional
               premium, which shall not exceed one hundred
               percent (100%) of the Policy Premium stated in
               Item 4 of the Declarations, to an extension of
               coverage afforded by this POLICY with respect
               to any CLAIM first made against any DIRECTOR
               or OFFICER during the period of twelve (12)
               months after the effective date of such
               cancellation or nonrenewal, but only with
               respect to any WRONGFUL ACT during the
               COVERAGE PERIOD. This right of extension shall
               terminate unless written notice of such
               election is received by the INSURER within
               thirty (30) days after the effective date of
               cancellation or nonrenewal.

          (3)  In the event of renewal on terms and
               conditions different from those in effect
               during the POLICY PERIOD, the COMPANY shall
               have the right, upon execution of a warranty
               that all known CLAIMS and facts or
               circumstances likely to give rise to a CLAIM
               have been reported to the INSURER and payment
               of an additional premium to be determined by
               the INSURER which shall not exceed two hundred
               percent (200%) of the Policy Premium stated in
               Item 4 of the Declarations, to an extension of
               the original terms and conditions with respect
               to any CLAIM first made against any DIRECTOR
               or OFFICER during the period of twelve (12)
               months after the effective date of renewal,
               but only with respect to any WRONGFUL ACT
               committed during the COVERAGE PERIOD and not
               covered by the renewal terms and conditions.
               This right of extension shall terminate unless
               written notice of such election is received by
               the INSURER within thirty (30) days after the
               effective date of renewal.

     (M)  Cancellation

          This POLICY may be cancelled:

          (1)  at any time by the COMPANY by mailing written
               notice to the INSURER stating when thereafter
               cancellation shall be effective; or

          (2)  at any time by the INSURER by mailing written
               notice to the COMPANY stating when, not less
               than ninety (90) days from the date such
               notice was mailed, cancellation shall be
               effective, except in the event of cancellation
               for nonpayment of premiums, such cancellation
               shall be effective ten (10) days after the
               date notice thereof is mailed.

          The proof of mailing of notice to the address of
          the COMPANY stated in Item 7 of the Declarations or
          the address of the INSURER stated in Item 8 of the
          Declarations shall be sufficient proof of notice
          and the insurance under this POLICY shall end on
          the effective date and hour of cancellation stated
          in the notice.  Delivery of such notice either by
          the COMPANY or by the INSURER shall be equivalent
          to mailing.

          With respect to all cancellations, the premium
          earned and retained by the INSURER shall be the sum
          of (a) the Minimum Premium stated in Item 4B of the
          Declarations plus (b) the pro-rata proportion, for
          the period this POLICY has been in force, of the
          difference between (i) the Policy Premium stated in
          Item 4A of the Declarations and (ii) the Minimum
          Premium stated in Item 4B of the Declarations.

          The offer by the INSURER of renewal on terms,
          conditions or premiums different from those in
          effect during the POLICY PERIOD shall not
          constitute cancellation or refusal to renew this
          POLICY.

     (N)  Currency

          All amounts stated herein are expressed in United
          States Dollars and all amounts payable hereunder
          are payable in United States Dollars.

     (O)  Sole Agent

          The COMPANY first named in Item 1 of the
          Declarations shall be deemed the sole agent of each
          DIRECTOR and OFFICER for the purpose of requesting
          any endorsement to this POLICY, making premium
          payments and adjustments, receipting for payments
          of INDEMNITY and receiving notifications, including
          notice of cancellation from the INSURER.

     (P)  Acts, Omissions or Warranties

          The acts, omissions or warranties of any DIRECTOR
          or OFFICER shall not be imputed to any other
          DIRECTOR or OFFICER with respect to the coverages
          applicable under this POLICY.

     (Q)  Dispute Resolution and Service of Suit

          Any controversy or dispute arising out of or
          relating to this POLICY, or the breach, termination
          or validity thereof, shall be resolved in
          accordance with the procedures specified in this
          Section IV(Q), which shall be the sole and
          exclusive procedures for the resolution of any such
          controversy or dispute.

          (1)  Negotiation.  The COMPANY and the INSURER
               shall attempt in good faith to resolve any
               controversy or dispute arising out of or
               relating to this POLICY promptly by
               negotiations between executives who have
               authority to settle the controversy.  Any
               party may give the other party written notice
               of any dispute not resolved in the normal
               course of business.  Within fifteen (15) days
               the receiving party shall submit to the other
               a written response.  The notice and the
               response shall include (a) a statement of each
               party's position and a summary of arguments
               supporting that position, and (b) the name and
               title of the executive who will represent that
               party and of any other person who will
               accompany the executive.  Within thirty (30)
               days after delivery of the disputing party's
               notice, the executives of both parties shall
               meet at a mutually acceptable time and place,
               and thereafter as often as they reasonably
               deem necessary, to attempt to resolve the
               dispute.  All reasonable requests for
               information made by one party to the other
               will be honored.  If the matter has not been
               resolved within sixty (60) days of the
               disputing party's notice, or if the parties
               fail to meet within thirty (30) days, either
               party may initiate mediation of the
               controversy or claim as provided hereinafter.

               All negotiations pursuant to this clause will
               be kept confidential and shall be treated as
               compromise and settlement negotiations for
               purposes of the Federal Rules of Evidence and
               state rules of evidence.

          (2)  Mediation.  If the dispute has not been
               resolved by negotiation as provided herein,
               the parties shall endeavor to settle the
               dispute by mediation under the then current
               CPR Institute Model Procedure for Mediation of
               Business Disputes.  The neutral third party
               will be selected from the CPR Institute Panels
               of Neutrals, with the assistance of the CPR
               Institute.

          (3)  Arbitration.  Any controversy or dispute
               arising out of or relating to this POLICY, or
               the breach, termination or validity thereof,
               which has not been resolved by non-binding
               means as provided herein within ninety (90)
               days of the initiation of such procedure,
               shall be settled by binding arbitration in
               accordance with the CPR Institute Rules for
               Non-Administered Arbitration of Business
               Disputes (the "CPR Rules") by three (3)
               independent and impartial arbitrators.  The
               COMPANY and the INSURER each shall appoint one
               arbitrator; the third arbitrator, who shall
               serve as the chair of the arbitration panel,
               shall be appointed in accordance with the CPR
               Rules.  If either the COMPANY or the INSURER
               has requested the other to participate in a
               non-binding procedure and the other has failed
               to participate, the requesting party may
               initiate arbitration before expiration of the
               above period.  The arbitration shall be
               governed by the United States Arbitration Act,
               9 U.S.C. Subsection 1 et seq., and judgment
               upon the award rendered by the arbitrators may
               be entered by any court having jurisdiction
               thereof.  The terms of this POLICY are to be
               construed in an evenhanded fashion as between
               the COMPANY and the INSURER in accordance with
               the laws of the jurisdiction in which the
               situation forming the basis for the
               controversy arose.  Where the language of this
               POLICY is deemed to be ambiguous or otherwise
               unclear, the issue shall be resolved in a
               manner most consistent with the relevant terms
               of this POLICY without regard to authorship of
               the language and without any presumption or
               arbitrary interpretation or construction in
               favor of either the COMPANY or the INSURER.
               In reaching any decision the arbitrators shall
               give due consideration for the customs and
               usages of the insurance industry.  The
               arbitrators are not empowered to award damages
               in excess of compensatory damages and each
               party hereby irrevocably waives any such
               damages.

               In the event of a judgment being entered
               against the INSURER on an arbitration award,
               the INSURER at the request of the COMPANY,
               shall submit to the jurisdiction of any court
               of competent jurisdiction within the United
               States of America, and shall comply with all
               requirements necessary to give such court
               jurisdiction and all matters relating to such
               judgment and its enforcement shall be
               determined in accordance with the law and
               practice of such court.

          (4)  Service of Suit.  Service of process in such
               suit or any other suit instituted against the
               INSURER under this POLICY may be made upon
               Messrs. LeBoeuf, Lamb, Greene, & MacRae,
               L.L.P., 125 West 55th Street, New York, New
               York  10019.  The INSURER will abide by the
               final decision of the court in such suit or of
               any appellate court in the event of any
               appeal.  Messrs. LeBoeuf, Lamb, Greene &
               MacRae, L.L.P. are authorized and directed to
               accept service of process on behalf of the
               INSURER in any such suit and, upon the
               COMPANY's request, to give a written
               undertaking to the COMPANY's that they will
               enter a general appearance upon the INSURER's
               behalf in the event such suit is instituted.
               Nothing in this clause constitutes or should
               be understood to constitute a waiver of the
               INSURER's right to commence an action in any
               court of competent jurisdiction in the United
               States, to remove an action to a United States
               District Court, or to seek to transfer a case
               to another court as permitted by the laws of
               the United States or of any state in the
               United States.

     (R)  Severability

          In the event that any provision of this POLICY
          shall be declared or deemed to be invalid or
          unenforceable under any applicable law, such
          invalidity or unenforceability shall not affect the
          validity or enforceability of the remaining portion
          of this POLICY.

     (S)  Non-assessability

          The COMPANY (and, accordingly, any DIRECTOR or
          OFFICER for whom the COMPANY acts as agent) shall
          only be liable under this POLICY for the premium
          stated in Item 4 of the Declarations.  Neither the
          COMPANY nor any DIRECTOR or OFFICER for whom the
          COMPANY acts as agent shall be subject to any
          contingent liability or be required to pay any dues
          or assessments in addition to the premium described
          above.

     (T)  Allocation
     
          If a CLAIM is made against both the DIRECTORS and
          OFFICERS and others, including the COMPANY, or if a
          CLAIM against the DIRECTORS and OFFICERS includes
          both covered and non-covered matters, the DIRECTORS
          and OFFICERS, the COMPANY and the INSURER shall
          allocate any defense costs, settlement, judgment or
          other loss on account of such CLAIM between covered
          ULTIMATE NET LOSS attributable to the CLAIM against
          the DIRECTORS and OFFICERS and non-covered loss.
          Such allocation shall be based upon the relative
          exposure of each party to such CLAIM for covered
          and non-covered matters and the relative benefit to
          each party from the defense or settlement of such
          CLAIM.
     
          If the DIRECTORS and OFFICERS, COMPANY and the
          INSURER agree on an allocation of DEFENSE COSTS,
          the INSURER shall advance on a current basis
          DEFENSE COSTS allocated to the covered ULTIMATE NET
          LOSS.  If the DIRECTORS and OFFICERS, COMPANY and
          the INSURER cannot agree on an allocation:
     
          (1)  no presumption as to allocation shall exist in
               any arbitration, suit or other proceeding;

          (2)  the INSURER shall advance on a current basis
               DEFENSE COSTS which the INSURER believes to be
               covered under this Policy until a different
               allocation is negotiated, mediated or
               arbitrated; and
          
          (3)  any disagreement on the allocation of DEFENSE
               COSTS is to be settled in accordance with
               Condition (Q).
          
          Any negotiated, mediated or arbitrated allocation
          of DEFENSE COSTS on account of a CLAIM shall be
          applied retroactively to all DEFENSE COSTS on
          account of such CLAIM, notwithstanding any prior
          advancement to the contrary.  Any allocation or
          advancement of DEFENSE COSTS on account of a CLAIM
          shall not apply to or create any presumption with
          respect to the allocation of INDEMNITY on account
          of such CLAIM.  Advancement by the INSURER of
          DEFENSE COSTS shall be conditioned upon the
          DIRECTORS, OFFICERS or COMPANY, as applicable,
          providing a satisfactory written undertaking to
          repay the INSURER any DEFENSE COSTS finally
          established not be insured.
          
          IN WITNESS WHEREOF, Associated Electric & Gas
          Insurance Services Limited has caused this POLICY
          to be signed by its Chairman at Hamilton, Bermuda.
          However, this POLICY shall not be binding upon the
          INSURER unless countersigned on the Declaration
          Page by a duly authorized representative of the
          INSURER.
          


     /s/ Bernard J. Kennedy             /s/  Alan J. Maguire
     Bernard J. Kennedy, Chairman       Alan J. Maguire, President
                                        and Chief Operating Officer

    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Endorsement No. 1   Effective Date of Endorsement June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.

It is understood and agreed that this POLICY is hereby
amended as indicated.  All other terms and conditions of this
POLICY remain unchanged.

     DELETION OF FAILURE TO MAINTAIN INSURANCE EXCLUSION

Section III, EXCLUSIONS (G) Failure to Maintain Insurance
Exclusion, is deleted in its entirety.





/s/  Brian Madden
Signature of Authorized Representative


    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Endorsement No. 2   Effective Date of Endorsement June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.

It is understood and agreed that this POLICY is hereby
amended as indicated.  All other terms and conditions of this
POLICY remain unchanged.



    OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
         INCLUDING MANAGEMENT OR OPERATING COMMITTEE

I.   Definition (E) DIRECTOR and OFFICER is amended to
     include the following:

     (4)  (a)  any director, officer, trustee or employee of
               the COMPANY who is serving at the specific
               written request of the COMPANY in the
               position of a director, officer, trustee or
               member of the Management or Operating
               Committees of the outside FOR-PROFIT
               ORGANIZATION, which position and FOR-PROFIT
               ORGANIZATION are named in attachment OPC-FPM1,
               while such director, officer, trustee or
               employee is acting in such capacity; and

          (b)  any present or former director, officer,
               trustee or employee of the COMPANY who has
               served at the specific written request
               of the COMPANY in the position of a director,
               officer, trustee or member of the Management
               or Operating Committees of an outside FOR-
               PROFIT ORGANIZATION while such director,
               officer, trustee or employee was acting in
               such capacity; provided, however, that such
               director, officer, trustee or employee, such
               outside FOR-PROFIT ORGANIZATION and such
               position were named in an endorsement (similar
               to this Endorsement) to the Directors' and
               Officers' Policy of the INSURER in force at
               the time at which such director, officer,
               trustee or employee was acting in such
               capacity.

II.  The following Definition is added to the POLICY:

     (R)  FOR-PROFIT ORGANIZATION:  The term "FOR-PROFIT
          ORGANIZATION" shall mean an organization other than
          a NOT-FOR-PROFIT ORGANIZATION.

III. Exclusion (L) is hereby deleted in its entirety and
     replaced with the following:

     (L)  where such CLAIM(S) arises out of such DIRECTOR'S or
          OFFICER'S activities as a director, officer or trustee of any
          entity other than:
     
          (1)  the COMPANY; or

          (2)  any outside NOT-FOR-PROFIT ORGANIZATION as
               provided in Section II(E)(2); or

          (3)  any outside FOR-PROFIT ORGANIZATION as
               provided in an OUTSIDE POSITION COVERAGE - FOR-
               PROFIT ORGANIZATIONS Endorsement.

                              
    OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
         INCLUDING MANAGEMENT OR OPERATING COMMITTEE


IV.  Notwithstanding any other provision of the POLICY to the
     contrary, the insurance provided by this Endorsement is
     specifically in excess of and shall not contribute with
     any indemnification or insurance provided by an outside
     FOR-PROFIT ORGANIZATION, to any director, officer,
     trustee or employee of the COMPANY.

     Under no circumstances shall the insurance provided by
     this Endorsement apply to:

     (1)  any director, officer or trustee of the outside FOR-
          PROFIT ORGANIZATION who is or was not a director,
          officer, trustee or employee of the COMPANY and who
          is not named in attachment OPC-FPM1; or

     (2)  the outside FOR-PROFIT ORGANIZATION

V.   The Limits of Liability stated in Item 5 of the
     Declarations and the UNDERLYING LIMITS stated in Item 6
     of the Declarations shall apply unless a specific Limit
     of Liability or UNDERLYING LIMIT is stated below:

Item 5:   Limits of Liablity:
          A.   $                   Each WRONGFUL ACT
          B.   $                   Aggregate Limit of Liability for the
                                   POLICY PERIOD

Item 6:   UNDERLYING LIMITS:
          This POLICY is written as          Insurance

          A.   If this POLICY is written as Primary Insurance
               with respect to Insuring Agreement I(A)(2)
               only:
               (1)  $              Each WRONGFUL ACT not arising
                                   from NUCLEAR OPERATIONS
               (2)  $              Each WRONGFUL ACT arising from
                                   NUCLEAR OPERATIONS

          B.   If this POLICY is written as Excess Insurance:
               (1)  (a)  $         Each WRONGFUL ACT
                    (b)  $         In the Aggregate for all WRONGFUL ACTS
               (2)       $         Each WRONGFUL ACT not covered
                                   under Underlying Insurance
               (3)  In the Event of Exhaustion of the UNDERLYING LIMIT
                    stated in Item 6(B)(1)(b) above with respect to Insuring
                    Agreement I(A)(2) only:
                    (a)  $         Each WRONGFUL ACT not arising from
                                   NUCLEAR OPERATIONS
                    (b)  $         Each WRONGFUL ACT arising from NUCLEAR
                                   OPERATIONS

          The Limit of Liability stated in this section is
          part of and not in addition to the Limits of
          Liability stated in Item 5 of the Declarations.



/s/  Brian Madden
Signature of Authorized Representative

    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Attachment OPC-FPM1 to Endorsement No. 2     Effective Date of Endorsement
                                                June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.

Name, FOR-PROFIT ORGANIZATION and position of each director,
officer, trustee or employee of the COMPANY covered under
Endorsement No. 2


NAME                FOR-PROFIT ORGANIZATION       POSITION

John R. Hodowal     Tecumseh Coal Corp            Director
Ramon L. Humke      Tecumseh Coal Corp            Director


    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Endorsement No. 3        Effective Date of Endorsement June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.


It is understood and agreed that this POLICY is hereby
amended as indicated.  All other terms and conditions of this
POLICY remain unchanged.



               COMMON WRONGFUL ACT ENDORSEMENT
    (OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATION)

Insuring Agreement I(B) Limits of Liability, is amended by
the addition of the following:

     (5)  With respect to ULTIMATE NET LOSS arising out of any
          WRONGFUL ACT in connection with service for an outside FOR-
          PROFIT ORGANIZATION as provided in Endorsement No. 2 "OUTSIDE
          POSITION COVERAGE" attached to this POLICY, if:
     
          (a)  such WRONGFUL ACT results in liability being imposed
               upon one or more DIRECTORS and OFFICERS under this
               POLICY and also upon directors and officers and
               general partners under any other directors and
               officers or general partner liability insurance
               policies issued by the INSURER to any organization;
               and
          
          (b)  the total of the ULTIMATE NET LOSS under this POLICY
               and the ultimate net loss under such other policies
               issued by the INSURER equals or exceeds $35,000,000;

          the maximum amount payable by the INSURER under
          this POLICY in the aggregate for all UTLIMATE NET
          LOSS resulting from such WRONGFUL ACT shall be the
          lesser of the applicable Limit of Liability
          provided by this POLICY or the product of:
          
          (i)  the applicable Limit of Liability provided by this
               POLICY divided by the total limits of liability per wrongful
               act applicable to such wrongful act under all policies issued
               by the ISSUER; and
          
          (ii) $35,000,000.

          If the amount paid under this POLICY with respect
          to such WRONGFUL ACT exceeds the COMPANY'S
          proportionate share of the $35,000,000 as
          determined above, the COMPANY shall refund such
          excess to the INSURER promptly.

As used in this Endorsement, reference to Endorsement No. 2
shall include not only the Endorsement as originally issued,
but also any and all subsequent amendments thereto.


/s/  Brian Madden
Signature of Authorized Representative

    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Endorsement No. 4         Effective Date of Endorsement   June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.


It is understood and agreed that this POLICY is hereby
amended as indicated.  All other terms and conditions of this
POLICY remain unchanged.



         WRONGFUL TERMINATION EXCLUSION ENDORSEMENT


The POLICY is amended as follows:

1.   Exclusion (D)(3) is deleted in its entirety and replaced with the
     following:

     (3)  discrimination, sexual harassment or wrongful termination

2.   Exclusion (K)(3) is deleted in its entirety.  The word "or"at the
     end of Exclusion (K)(2) is deleted and the semi-colon is changed
     to a period.






/s/  Brian Madden
Signature of Authorized Representative

    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Endorsement No. 5         Effective Date of Endorsement  June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.


It is understood and agreed that this POLICY is hereby
amended as indicated.  All other terms and conditions of this
POLICY remain unchanged.


            CORPORATE ENTITY COVERAGE ENDORSEMENT
                      (SEPARATE LIMIT)



(A)   Except as provided in paragraph (B) below, if the COMPANY is made
      a defendant in any suit or proceeding in which a DIRECTOR or OFFICER
      is also a defendant, in his respective capacity as a DIRECTOR or
      OFFICER, the INSURER shall indemnify the COMPANY for any and all sums
      required to reimburse it for ULTIMATE NET LOSS it has incurred in
      connection with CLAIMS made against the COMPANY in such suit or
      proceeding, provided (i) a DIRECTOR or OFFICER is a defendant in such
      suit or proceeding as of the date the COMPANY is first named as a
      defendant, (ii) such ULTIMATE NET LOSS of the COMPANY directly relates
      to a CLAIM which, if made against a DIRECTOR or OFFICER, would be
      covered by the POLICY and (iii) such ULTIMATE NET LOSS arises from a
      CLAIM first made against the DIRECTORS or OFFICERS during the POLICY
      PERIOD or during the DISCOVERY PERIOD, if purchased.

(B)   The coverage under paragraph (A) above shall not apply to, and there
      shall be no coverage under this Endorsement for ULTIMATE NET LOSS
      incurred by the COMPANY in connection with any CLAIM brought by or on
      behalf of the COMPANY.

(C)   The maximum amount payable by the INSURER under this Endorsement for
      all ULTIMATE NET LOSS arising out of any one WRONGFUL ACT shall be
      the amount slated as the limit of liability each WRONGFUL ACT in
      Section (H) of this Endorsement.  The maximum amount payable by the
      INSURER under this Endorsement during the POLICY PERIOD for all
      ULTIMATE NET LOSS arising out of all WRONGFUL ACTS shall be the
      amount stated as the Aggregate Limit of Liability for the POLICY
      PERIOD in Section (H) of this Endorsement.

(D)   For purposes of determining and applying the UNDERLYING LIMITS
      applicable to the POLICY and this Endorsement, any ULTIMATE NET LOSS
      of the COMPANY for which the INSURER shall be liable under this
      Endorsement shall be included within and considered a portion of the
      ULTIMATE NET LOSS covered under Insuring Agreement I(A)(2) with
      respect to the WRONGFUL ACT for which a CLAIM is made against a
      co-defendant DIRECTOR or OFFICER.  Subject to the foregoing, the
      INSURER shall only be liable under this Endorsement for the amount
      of ULTIMATE NET LOSS which, together with ULTIMATE NET LOSS covered
      under this POLICY without regard to this Endorsement, is in excess
      of the amount stated as the UNDERLYING LIMITS applicable to
      ULTIMATE NET LOSS covered under Insuring Agreement I(A)(2).

(E)   For purposes of determining the INSURER'S Limits of Liability under
      the POLICY and this Endorsement, all defense costs, settlement,
      judgment or other loss on account of any CLAIM shall be fairly
      allocated between the COMPANY and the DIRECTORS and OFFICERS
      consistent with the terms of the POLICY.

(F)   All capitalized terms under in this Endorsement shall have the same
      meaning as ascribed to them in the POLICY, except that for purposes
      of the coverage supplied by this Endorsement:

      (1)  references to "DIRECTORS and OFFICERS" in the definitions of the
           terms "CLAIM", "DEFENSE COSTS" and "INDEMNITY" shall be deemed
           also to be references to the COMPANY; and
  
      (2)  "WRONGFUL ACT" shall also mean any alleged breach of duty,
           neglect, error, misstatement, misleading statement or
           omission actually or allegedly caused, committed or attempted
           by the COMPANY, but only if such breach, neglect, error,
           misstatement, misleading statement or omission is
           interrelated with WRONGFUL ACTS of DIRECTORS or OFFICERS that
           are alleged in the same suit or proceeding.  All interrelated
           breaches of duty, neglects, errors, misstatements, misleading
           statements or omissions actually or allegedly caused,
           committed or attempted by the COMPANY shall be deemed to be a
           single "WRONGFUL ACT".

(G)   (1)  Except as otherwise specifically provided in Paragraph (G)(2)
           below, all Conditions set forth in the POLICY shall apply to the
           coverage supplied under this Endorsement.

      (2)  (i)  The second sentence of Condition (G) shall have no
                applicability to the coverage supplied under this
                Endorsement, and the bankruptcy or insolvency of
                the COMPANY shall not relieve the INSURER of any
                of its obligations under this Endorsement.

           (ii) For purposes of this Endorsement, reference in any
                Condition to "Limits of Liability" shall be deemed
                to refer to the Limits of Liability set forth in
                paragraph (H) below.

          (iii) For purposes of this Endorsement, reference in
                Condition (L) to a CLAIM first made against any
                DIRECTOR or OFFICER shall be deemed to refer to
                CLAIMS first made against the COMPANY.

           (iv) For purposes of this Endorsement, reference in
                Condition (T) to "covered ULTIMATE NET LOSS
                attributable to the CLAIM against the DIRECTORS
                and OFFICERS" shall be deemed to include CLAIM(S)
                against the COMPANY for which coverage is supplied
                under this Endorsement.
               
(H)   Endorsement Limits of Liability:

            A.  $10,000,000         Each WRONGFUL ACT
            B.  $10,000,000         Aggregate Limit of Liability for the
                                    POLICY PERIOD

(I)   The INSURER shall not be liable, under this Endorsement, to make
      any payment for ULTIMATE NET LOSS arising from any CLAIMS arising
      from any prior or pending litigation as of                    , as
      well as all future CLAIMS or litigation based upon the prior or
      pending litigation or derived from the same or essentially the same
      facts (actual or alleged) that gave rise to the prior or pending
      litigation.





/s/  Brian Madden
Signature of Authorized Representative


    ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED

Endorsement No. 6             Effective Date of Endorsement June 1, 1998

Attached to and forming part of POLICY No. D0392A1A98

COMPANY IPALCO Enterprises, Inc.


It is understood and agreed that this POLICY is hereby
amended as indicated.  All other terms and conditions of this
POLICY remain unchanged.


Endorsement No. 3 - Common Wrongful Act Endorsement is
deleted in its entirety.




/s/  Brian Madden
Signature of Authorized Representative