# CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM

| Named Insured | International Business Machines Corporation |
|---------------|-------------------------------------------|
| Endorsement Number | 2                                         |
| Policy Symbol | XCP                                       |
| Policy Number | G2464845A                                 |
| Policy Period | 05/21/2008 - 05/21/2009                    |
| Effective Date of Endorsement | 05/21/2008                                |
| Issued By (Name of Insurance Company) | ACE American Insurance Company              |

**THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.**

This endorsement modifies insurance provided under the following:

**EXCESS LIABILITY CATASTROPHE POLICY**

A. If aggregate insured losses attributable to terrorist acts certified under the federal Terrorism Risk Insurance Act exceed $100 billion in a Program Year (January 1 through December 31) and WE have met our insurer deductible under the Terrorism Risk Insurance Act, WE shall not be liable for the payment of any portion of the amount of such losses that exceeds $100 billion, and in such case insured losses up to that amount are subject to pro rata allocation in accordance with procedures established by the Secretary of the Treasury.

B. CERTIFIED ACT OF TERRORISM means an act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism pursuant to the federal Terrorism Risk Insurance Act. The criteria contained in the Terrorism Risk Insurance Act for a CERTIFIED ACT OF TERRORISM include the following:

1. The act resulted in insured losses in excess of $5,000,000 in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and
2. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.

C. In the event that any CERTIFIED ACT OF TERRORISM is not covered by UNDERLYING INSURANCE or OTHER INSURANCE due to any exclusion or exclusions contained therein, WE will pay ULTIMATE NET LOSS in excess of the UNDERLYING INSURANCE Each Occurrence Limit stated in the Declarations.

All other terms and conditions of this policy remain unchanged.

**Authorized Representative**

**NOTICE: THESE POLICY FORMS AND THE APPLICABLE RATES ARE EXEMPT FROM THE FILING REQUIREMENTS OF THE NEW YORK STATE INSURANCE DEPARTMENT. HOWEVER, SUCH FORMS AND RATES MUST MEET THE MINIMUM STANDARDS OF THE NEW YORK INSURANCE LAWS AND REGULATIONS.**