# NEW YORK CHANGES TRANSFER OF DUTIES WHEN A LIMIT OF INSURANCE IS USED UP

| Named Insured | International Business Machines Corporation |
|---------------|-------------------------------------------|
| Endorsement Number | 7 |
| Policy Symbol | XOO |
| Policy Number | G24895944 |
| Policy Period | 05/21/2009 to 05/21/2010 |
| Effective Date of Endorsement | 05/21/2009 |
| Issued By (Name of Insurance Company) | ACE Property and Casualty Insurance Company |

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

This endorsement modifies all insurance provided under the following:

**COMMERCIAL UMBRELLA LIABILITY POLICY**

The following condition is added to Section VI. CONDITIONS:

P. Transfer of Duties When a Limit of Insurance Is Used Up

(a) If we conclude that, based on "occurrences," offenses, claims or "suits" which have been reported to us and to which this insurance may apply, the:
(1) General Aggregate Limit (other than the Products/Completed Operations Aggregate Limit);
(2) Products/Completed Operations Aggregate Limit; or
(3) Each "Occurrence" Limit is likely to be used up in the payment of judgments or settlements, we will notify the first Named "Insured", in writing, to that effect.

(b) When a limit of insurance described in paragraph (a) above has actually been used up in the payment of judgments or settlements:
(1) We will notify the first Named "Insured," in writing, as soon as practicable, that:
(a) Such a limit has actually been used up; and
(b) Our duty to defend "suits" seeking damages subject to that limit has also ended.
(2) We will initiate, and cooperate in, the transfer of control, to any appropriate "insured," of all claims and "suits" seeking "damages" which are subject to that limit and which are reported to us before that limit is used up. That "insured" must cooperate in the transfer of control of said claims and "suits."

We agree to take such steps, as we deem appropriate, to avoid a default in, or continue the defense of, such "suits" until such transfer is completed, provided the appropriate "insured" is cooperating in completing such transfer.

We will take no action whatsoever with respect to any claim or "suit" seeking damages that would have been subject to that limit, if the claim or "suit" is reported to us after that limit of insurance has been used up.

(3) The first Named "insured," and any other "insured" involved in a "suit" seeking damages subject to that limit, must arrange for the defense of such "suit" within such time period as agreed to between the appropriate "insured" and us. Absent any such agreement, arrangements for the defense of such "suit" must be made as soon as practicable.

XS-23206 (01/08) Includes copyrighted material of Insurance Services Office, Inc. with its permission Page 1 of 2

CLASS CODE 2-13000

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 LAW AND REGULATIONS.