# CANOPIUS Bermuda

**Endorsement No:** 002

**This endorsement effective:** May 21, 2010 (at 12:01AM prevailing time at the address of the Named Insured as shown in Item 1(b) of the Declarations)

**Forms a part of Policy No:** IBM-141/CUBLBSF02-10

**Issued to:** International Business Machines Corporation

**By:** Canopius Underwriting Bermuda Limited

## CHOICE OF LAW ENDORSEMENT - IV

It is hereby agreed that 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 substantive internal law (i.e., excluding procedural and choice-of-law rules) of the State of New York, except insofar as such law:

1. May prohibit payment in respect of "punitive damages" hereunder but only where the following conditions are met:
   a. The "punitive damages" are awarded by a court of law in a judgment against the Insured;
   b. The same judgment also awards compensatory damages against the Insured that: (1) arise out of the same Occurrence, Claim or Loss; and (2) are otherwise covered by this Policy; and
   c. Such award of "punitive damages" is permitted to be covered by insurance under the law of a U.S. jurisdiction that has a "substantial relationship" to the Insured, the Company, or this Policy.

If all three conditions a., b., and c. above are satisfied, the Company will follow the law of such jurisdiction that is most favorable to the Insured in determining whether such "punitive damages" are insurable, and if they are insurable under the law of such jurisdiction, the Company will pay on behalf of the Insured those sums in excess of the "retained limit" that the Insured is liable to pay as a result of the award, subject to the limitations in sections (i), through (iv.) below, the limits of insurance and all other terms and conditions of this Policy:

(i.) "Punitive damages" will not be considered damages to which this insurance applies, and we will have no obligation with respect to such damages, if:

Ref:BSF02-CUBL003(c)-07-09
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