# INTERNATIONAL BUSINESS MACHINES CORPORATION

## Broader than any of the Underlying Insurance). If any Underlying Insurance contains a stated sublimit of liability or a separate stated limit of liability in respect of any coverage which in either case is less than the limit of liability applicable to other coverages thereunder, this Policy shall not apply to any Occurrence or Loss encompassed thereby, except as otherwise provided by written endorsement to this Policy.

### III.
The Company has no duty to assume control of the investigation, defense or settlement of any claim, suit or proceeding, except, however, the Company will assume the defense of a suit brought against the Insured seeking damages to which this Policy applies:

1. If all insurers providing the Underlying Insurance are obligated by the terms and condition of their policies to assume the defense of such suit; and
2. After all applicable limits of liability of Underlying Insurance have been exhausted by actual payment of Loss;

provided, however, that such assumption of the defense shall terminate upon exhaustion of the applicable limit of liability hereunder.

The provisions of the Followed Policy as respects whether Defense Costs are included within the applicable limits of liability or are in addition to such limits of liability shall apply to this Policy, but, subject to all the limitations, terms, conditions and exclusions applicable to this Policy, the Company shall be liable only for Defense Costs incurred after all applicable limits of liability of Underlying Insurance have been exhausted by actual payment of Loss or, if applicable, Defense Costs and prior to exhaustion of the applicable limit of liability hereunder.

The Company in any event has the right to investigate any Occurrence or claim and to participate in the investigation, settlement or defense of any claim, suit or proceeding that the Company feels may create liability on its part. The Named Insured shall furnish to the Company upon request complete and accurate copies of any and all Underlying Insurance policies.

### IV.
A. As a condition precedent to the obligations of the Company under this Policy, the Named Insured must see to it that the Company is notified as soon as practicable of any Loss that may result in a claim or suit under this Policy. The Named Insured shall also provide other claim information or reports as reasonably requested by the Company from time to time.

B. No amendment, addition or modification to the Followed Policy which causes a material change in risk shall operate to alter the terms, conditions, exclusions or limitations of the coverage provided by the Policy, except as set forth by written endorsement hereof. The Company shall not be required to issue such an endorsement, and may charge additional premium for issuing such endorsement.

V. While this Policy is in effect, the Insured agrees to maintain the Underlying Insurance in full force. The Insured's failure, or the failure of others, to comply with this condition will not invalidate this Policy, but in the event of such failure, the Company will only be liable the same extent as if there had been compliance.

VI. The Insured may not, without the Company's consent (which shall not be unreasonably withheld), incur any expense or make any payment which may involve this Policy. Any such unauthorized expense or payment will be at the Insured's own cost.

FORM XL XS-CCC (11/03)