# INTERNATIONAL BUSINESS MACHINES CORPORATION

## FOLLOWING FORM EXCESS LIABILITY INSURANCE POLICY
### OCCURRENCE FORM

**Issued by**
XL INSURANCE (BERMUDA) LTD
(herein called the "Company")

## INSURING AGREEMENT

I. This Policy shall provide the Insured with excess insurance coverage for Loss in accordance with the same warranties, terms, conditions, exclusions and limitations as are contained in the insurance policy (including endorsements) described in Item 7 of the Declarations and attached hereto ("Followed Policy") as of the inception date of this Policy, except as to the premium, limits of liability, attachment points, policy period, the arbitration provision, the choice of law provision, warranties, exclusions, limitations and any other terms and conditions of this Policy inconsistent with the Followed Policy. Except where the context otherwise requires, any references to the insurer or the policy itself in the Followed Policy shall be deemed to be references to the Company or this Policy, respectively, for the purpose of the following form coverage afforded hereunder, and any similar conforming changes shall be made as required.

As respects each Occurrence, the Limits of Liability set forth in Item 4 of the Declarations apply only in excess of the lesser of (i) and (ii): with (i) being an amount equal to the per Occurrence limit of liability set forth in Item 5 of the Declarations and (ii) being an amount that is the greater of (x) the difference between the aggregate limit of liability set forth in Item 5 of the Declarations and the amount of Loss actually paid pursuant to Underlying Insurance for the applicable coverage and (y) the Minimum Per Occurrence Retention Amount set forth in Item 4 of the Declarations ("Minimum Retention Amount").

Subject to the Minimum Retention Amount as respects each Occurrence, this Policy shall pay Loss only in excess of the limits of liability of Underlying Insurance as set forth in Item 5: Total Underlying Limits of Insurance of the Declarations page and shall not drop down or make any payment (notwithstanding anything to the contrary in the Followed Policy) for any reason other than exhaustion by actual payment of Loss under the Underlying Insurance, including, but not limited to, uncollectibility (in whole or in part, by reason of insolvency of the insurer or for any other reason) of any limit of liability included in Item 5 of the Declarations, cancellation or lapse of any Underlying Insurance, or any Underlying Insurance containing terms and conditions different from the Followed Policy. The risk in respect of the foregoing is retained by the Insured.

Notwithstanding the foregoing, but subject to the Minimum Retention Amount as respects each Occurrence, if any Underlying Insurance shown in the Schedule of Underlying Policies attached hereof has a limit of liability:

(1) greater than the amount shown in such Schedule, then this Policy will apply in excess of the greater amount; or

(2) less than the amount shown in such Schedule, then this Policy will apply in excess of the amount shown in such Schedule.

II. Notwithstanding anything to the contrary set forth in Item 5: Total Underlying Limits of Insurance of the Declarations page, if any Underlying Policy excludes or otherwise does not cover an Occurrence or Loss (for reasons other than exhaustion of the applicable limit of liability), then the Company will not cover such Occurrence or Loss, as the case may be (i.e., this Policy is no

FORM XL-XS-OCC (11/03)