**BINDER #1278**

**5/13/85**

1) Terms are as follows:

(a) Tax Multiplier = 1.031
   LCF = 1.08 applied to total loss limit
   Basic = .116 (540,000)
   Minimum = BxTM (556,740)
   Maximum = 1.85 ($8,616,721)
   Loss Limit = $1,000,000 (allocated loss expense applies separately by line in addition to loss limit)
   Commission Standard = 5.8%
   = $4,657,687

2) Required Letter of Credit - $2,500,000

3) Required Escrow Fund - $300,000

4) Collected premium in first twelve months ($389,929) is at a commission rate of 48.5%. Commission on audit is 5.8%.

5) Paid Loss Retro for the year 5/21/85-86 will be converted to an Incurred retro after its fifth adjustment.

6) Effective 5/21/85, policy will contain the ISO Pollution Exclusion (copy of which was given to J&H).

7) Rate = $.3387 per $1,000 of payroll

8) Amount to be collected:

   Deposit of $32,495
   11 Installments of $32,494 each = $357,434
   Total = $389,929

**Policy # CGL 3278678**
**BAP 3278679**

Page 2 of 2 Pages