PUBLIC OFFICIALS & ENTITY LIABILITY COVERAGE

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

Amended and Restated as of December 7, 2001

TABLE OF CONTENTS

1. Definitions for Public Officials and Entity Liability Coverage. 2

1.1 Customer 2

1.3 Defense Costs. 2

1.4 Employee. 2

1.5 Management 2

1.6 Not-For-Profit Organization. 2

1.7 PO&E Claim.. 2

1.8 Public Official 3

1.9 Public Utility Operations. 4

1.10 Ultimate Net Loss. 4

1.11 Vicarious Liability. 4

1.12 Wrongful Act 4

2. Insuring Agreement and Conditions for Public Officials & Entity Liability Coverage. 4

2.1 PO&E Coverage for Liability Claims Arising from a "Wrongful Act". 4

2.1.1 Coverage for a Member for Vicarious Liability does not Depend upon Whether the Public Official Satisfies the Coverage Qualifications. 5

2.1.2 Multiple Liability Claims/Single Wrongful Act 5

2.1.3 No Overlapping or Double Coverage. 5

2.1.4 No Imputation of Acts, Omissions or Warranties. 5

2.1.5 PO&E Coverage Regarding Outside Not-For-Profit Organization. 5

2.1.6 Single Liability Coverage Limit for Claims Under More than One Type of Liability Coverage. 6

2.2 Liability Coverage Limit 6

2.3 Deductible. 6

2.4 Coverage Qualifications for Public Officials. 7

2.5 Other Insurance and Third Party Indemnifications of Public Officials. 7

2.6 Separation of Insureds with Respect to PO&E Claims Asserted Among Members and Single Liability Coverage Limit 7

2.7 Board's Authority to Establish the Number of Wrongful Acts Involved in a Covered PO&E Claim.. 7

2.8 Survival of Coverage. 8

2.9 Intended Scope of PO&E Coverage. 8

2.9.1 Scope of PO&E Coverage for a Public Official in Proceedings not Currently Involving the Assertion of a Claim for Damages. 8

2.9.2 Scope of PO&E Coverage for a Member Employing a Public Official That is Involved in Proceedings not Currently Involving the Assertion of a Claim for Damages. 8

2.9.3 Scope of PO&E Coverage for a Member That is Involved in Proceedings not Currently Involving the Assertion of a Claim for Damages. 9

2.9.4 Reservation of Rights. 10

3. Exclusions for Public Officials & Entity Liability Coverage. 10

3.1 Fines and Penalties. 10

3.2 Wrongful Acts Occurring Outside Coverage Period. 10

3.3 Limitations Specific to PO&E Coverage for Public Officials and Member Indemnifications of Public Officials (Re: Personal Profits, Dishonest Acts, etc.) 11

3.4 Bodily Injury and Property Damage. 12

3.5 Personal Injuries From Specific Types of Wrongful Acts. 12

3.6 Member's Advertising Activities and Intellectual Property Claims. 12

3.7 Intentional, Knowing or Reckless Violations of or Non-Compliance with Applicable Law 12

3.8 Other Insurance and Third-Party Indemnifications. 13

3.9 Derivative and Security-Holder Claims. 13

3.10 Employee Claims re Employment Relationship. 13

3.11 Acts Other Than For a Member 14

3.12 Claims By or on Behalf of a Member Against its Own Employees. 14

3.13 Acts Outside Public Utility Operations. 14

3.14 Public Official's Acts as "Professional". 14

3.15 Breach of Contract 14

3.16 Unsatisfied Coverage Qualifications. 14

3.17 Nuclear Materials. 15

3.18 Injunctive Relief 16

3.19 When Fund Lacks Coverage Authority. 16