**Insured:** INTERNATIONAL BUSINESS MACHINES CORPORATION  
**Policy No.:** BM00024254LI09A  
**Endorsement No.:** 4  
**Effective Date:** MAY 21, 2009

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**CHOICE OF LAW ENDORSEMENT - III**

It is hereby agreed that this Policy and any dispute, controversy or Claim arising out of our relating to this Policy, shall be governed by and construed in accordance with the substantive internal law (i.e., excluding procedural and choice-of-law rules) of the State of New York, except insofar as such law: (1) may prohibit payment in respect of punitive damages hereunder; (2) pertains to regulation under New York Insurance Law, or regulations issued by the Insurance Department of the State of New York pursuant thereto, applying to insurers doing insurance business, or issuance, delivery or procurement of policies of insurance, within the State of New York or as respect risks or insured entities situated in the State of New York; or (3) are inconsistent with any provision of this Policy; provided, however, that the provisions, stipulations, exclusions and conditions of this Policy are to be construed in an even handed fashion as between the Insured and the Company; where the language of this Policy is deemed to be ambiguous or otherwise unclear, the issue shall be resolved in the manner most consistent with the relevant provisions, stipulations, exclusions and conditions (without regard to authorship of the language, without any presumption or arbitrary interpretation or construction in favour of either the Insured or the Company or reference to the "reasonable expectations" of either thereof or to contra proferentum and without reference to parol or other extrinsic evidence). In the event that this Policy is called on to pay any punitive damages arising out of a covered Occurrence, Claim or Loss, and any Underlying Policy(ies) exclude such punitive damages, then a separate per Occurrence, Claim or Loss "Self-Insured Punitive Damages Retention: of 200,000,000 will apply to such punitive damages and the Company will only pay those punitive damages that are in excess of the Self-Insured Punitive Damages Retention subject to the applicable limit(s) of this Policy, or the remaining limit(s) of this Policy where the applicable limit(s) have been eroded by payment of a covered Occurrence, Claim or Loss. Insofar as the substantive internal law of New York is inapplicable as provided herein or otherwise, and as respects arbitration procedure, the internal laws of England and Wales apply.

The terms, declarations, insuring agreements, definitions, exclusions and conditions of this Policy otherwise remain unchanged.

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**XL INSURANCE (BERMUDA) LTD**

By: **VICTORIA BENEVIDES**

Title: ASSISTANT VICE PRESIDENT

Date: JULY 20, 2009

Ref: XSBSF-005.01

XL INSURANCE