# INTERNATIONAL BUSINESS MACHINES CORPORATION

or other issue preclusion or estoppel effect against the Company in such arbitration, irrespective of whether or not the Company remained a party to such action or proceeding).

**XII.** Notwithstanding anything to the contrary in the Followed Policy, this Policy, and any dispute, controversy or claim arising out of or relating to this Policy, shall be governed by and construed in accordance with the internal laws of the State of New York, except insofar as such laws:

(1) may prohibit payment in respect of punitive damages hereunder;

(2) pertain to regulation under the 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 of procurement of policies of insurance, within the State of New York or as respects risks or insureds 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 unambiguous fashion as between the Insured and the Company; without limitation, 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 favor of either the Insured or the Company or reference to the "reasonable expectations" of either thereof or to contra proferentem and without reference to parol or other extrinsic evidence). To the extent that New York law is inapplicable by virtue of any exception or proviso enumerated above or otherwise, and as respects arbitration procedure pursuant to paragraph XI, the internal laws of England and Wales shall apply.

**XIII.** In addition to all of the exclusions of the Followed Policy, the following exclusions also shall apply to the coverage provided by this Policy:

A. This Policy shall not apply to bodily injury, personal injury, property damage or advertising liability arising out of the manufacture, distribution, sale, installation, removal, utilization, ingestion or inhalation of, or exposure to or existence of, as the case may be:

(1) asbestos or any asbestos-containing materials; provided, however, that this Exclusion shall not apply to property damage arising out of asbestos not contained in goods or products manufactured, sold, tested, handled or distributed by the Insured or others trading under its name as a result of explosion, hostile fire or lightning;

(2) tobacco or any tobacco products (or ingredients of, or used in the manufacture or production of, such products);

(3) 2, 3, 7, 8-TCDD (2, 3, 7, 8-tetrachlorodibenzo-p-dioxin);

(4) asbestiform talc;

(5) diethylstilbestrol ("DES");

(6) any intra-uterine device ("IUD");