PROPERTY POOL

GENERAL ASSESSMENT FORMULA

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

Amended and Restated as of November 21, 2002

TABLE OF CONTENTS

Definitions for Property Pool General Assessment Formula. 2

Annual Assessment Limit 2

Assessment Limit Overage. 2

Assessment Share. 2

Assigned Deductible. 2

Assigned Insured Value. 2

Basic Per Capita” Component 3

Blended Risk Based Rate. 3

Category of Insured Property. 3

Category of Risk. 3

Deductible. 3

Direct Physical Loss or Damage. 3

Exempted Category. 3

Exempt Category of Insured Property. 3

Exempt Category of Risk. 3

Excess Property Insurance Retention. 4

Gross Revenues. 4

Insured Location. 4

Insured Perils. 4

Insured Property. 4

Insured Value. 4

Item of Insured Property. 4

Mandatory Deductible. 4

Mothballed Equipment 4

Partially Exempt Insured Property. 5

Perils. 5

Property Coverage Limit 5

Property Deductible Credits. 5

Property Pool Operation Costs. 5

Relative Insured Value Component 5

Retention Adjusted Insured Values. 5

Risk Adjusted Insured Value. 6

Risk Based Component 6

Risk Based Rates. 6

Specific Risk Based Rate. 6

Valuation Cap. 6

Statement of Property General Assessment Formula. 7

Basic Per Capita” Component at 10%. 7

Relative Insured Value” Component at 20%.. 7

Risk Based” Component at 70%. 10

Property Deductible Credit for Assigned and Mandatory Deductibles. 13

Limitation on Amount of Annual Property General Assessments per Member 14

Application of Annual Assessment Limit 14

Reallocation of Assessment Limit Overages to Remaining Members. 14

Former Members. 15

New Members. 15

PROPERTY POOL

GENERAL ASSESSMENT FORMULA

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

Amended and Restated as of November 21, 2002

Overview of Assessment Formulas for PURMS Risk Pools

The “Assessment Formulas” Sections of the PURMS Joint Self-Insurance Agreement (“SIA”) set forth the formulas for assessing the Members of each Risk Pool for the Operational Costs the Fund incurs in operating their respective Risk Pools, including without limitation, Coverage Payments (all Risk Pools), Defense Costs (Liability Pool), Property Claim Costs (Property Pool), Direct H&W Claims Costs and Shared H&W Costs (H&W Pool), and the Direct and Shared Administrative Expenses of all Risk Pools.

The Liability Pool is governed by two Assessment Formulas, one for General Assessments and one for Premium Assessments. The two current formulas for the Liability Pool are:

(a) The Liability General Assessment Formula (with Annual Assessment Limit) (SIA § VIII); and

(b) The Liability Premium Assessment Formula (with Added-Risk Pass Through, and without Annual Assessment Limit) (SIA § IX).

The Liability General Assessment Formula was first adopted by the Members of the Fund on December 20. 1976, has been amended from time to time, and was unanimously re-adopted on March 30, 1995. The Liability Premium Assessment Formula (with Added-Risk Pass Through and without Annual Assessment Limit) was unanimously re-adopted by the Board at its General Meeting on December 9, 1994, effective January 1, 1995.

The Property Pool is also governed by two Assessment Formulas, one for General Assessments and one for Premium Assessments. The two current formulas for the Property Pool are:

(a) The Property General Assessment Formula (with Annual Assessment Limit) (SIA § XII); and

(b) The Property Premium Assessment Formula (without Annual Assessment Limit) (SIA § XIII).

The Property General Assessment and the Property Premium Assessment Formulas were unanimously adopted by the Members of the Fund, effective February 27, 1997, and were both amended and restated and unanimously adop