# Chubb Global Casualty

## I) Agreement between "You" and "Us"

### 1. General Terms

The Notice of Election is subject to the Collateral and Payment Agreement (hereinafter, the "Collateral Agreement") executed between the Insured and the Company and is a "Notice of Election" as that term is defined in the "Collateral Agreement". The terms "you", "yours" and the "Insured" refer to the named insured on the Policies listed in A) Schedule of Policies. (the "Policies"). The terms "us", "ours", "we" and the "Company" refer to the Issuing Companies listed in A) Schedule of Policies. All other capitalized terms in this Notice of Election are defined as provided in the Collateral Agreement.

This agreement describes the mutual agreement between you and us under which the final countrywide premiums for the Policies will be determined. If a state does not allow the adjustment of premium based upon this mutual agreement, the terms of premium adjustment for that state will be found on an endorsement to the policy and this agreement serves as the notice of election for that state. For those states, we will adjust your premiums in accordance with the applicable Policy and allocate the difference to the states that allow the premium to be adjusted in accordance with this agreement.

### 2. Premium Payment and Loss Reimbursement Terms

In addition to the final premiums, you are liable for the reimbursements of certain losses and Allocated Loss Adjustment Expense, under one or more deductible or loss reimbursement endorsements to the Policies or within the Loss Limitation of any Retrospectively Rated Policy, as shown in D) Reimbursable Losses.

You also agree to pay any state surcharges and/or assessments that are not included in the final premiums, as shown in G) Non-Premium Surcharges and Assessments herein and on the Policies.

Any payment due us, or return payment due you will be payable in its entirety within thirty (30) days from the date of our invoice.

### 3. Premium Calculation and Adjustment

The premiums shown in B) Premium Calculation and Adjustment for the scheduled Policies were calculated in accordance with approved rating plans or are subject to deregulation. You certify that you have elected the use of those rating plans. You also certify that you understand all terms, conditions, and provisions of those plans, including the methods of adjustment, payment, and penalties for cancellation outlined herein and/or in endorsements to the policies listed in the Schedule of Policies (the "Policies").

If the policies are cancelled prior to expiration, the estimated premium amounts shown in B) Premium Calculation and Adjustment for the scheduled Policies will be pro-rated and subject to any audit and adjustment shown in B) Premium Calculation and Adjustment.

No premium charge has been made for war-risk hazard, it being understood that the United States Government self-insures the exposures falling under the provisions of the War Hazards Compensation Act.

### 4. Claims Administration and Expense

The Company has contracted with the Claims Adjusting Service(s) shown in C) Claims Administration and Expense as its agent to investigate, adjust, settle and provide for the defense of claims in all states in accordance with the terms of the scheduled policies and to collect, calculate and administer the Paid Loss Deposit Fund and/or Claims Administration Expenses on the Company's behalf.

Should the Company terminate the contractual arrangement between the Company and any Claims Adjusting Service(s) at the request of the insured or should the Claims Adjusting Service no longer meet the Company's minimum requirements, the Company and the Insured shall select another Claims Adjusting Service that meets the Company's minimum requirements to handle future claims and possibly take over existing claims. Notwithstanding the previous sentence, if the Company and the Insured cannot come to a mutual agreement within a reasonable time needed to transfer claims, or if the Company believes in good faith that the finances of the existing Claims Adjusting Service have deteriorated or could deteriorate rapidly, then the Company shall select the new Claims Adjusting Service. Once the new Claims Adjusting Service is selected, this Agreement will be deemed automatically amended to reflect the new Claims Adjusting Service, and the Company will inform the Insured of the revised or additional Claims Administration Expenses. The Insured shall pay such amounts by the Required Payment Date.

In the event of the termination of such contractual arrangement, the Company shall administer, calculate and collect the Paid Loss Deposit Fund itself, or shall assign such responsibility to the replacement Claims Adjusting Service.

Claims Administration Expense will be charged for each individual type of claim listed in C) Claims Administration and Expense resulting from an accident, incident or occurrence.

Client will maintain a Claim Fund and will continue to remit additional funds, upon ESIS's written request, sufficient to maintain a minimum balance (the "Required Level") in the Claim Fund in an amount equal to the greater of: a) $425,943; or International Business Machines Corporation 05/17/2018 Notice of Election Page 9 of 36