# ENDORSEMENT # 7

This endorsement, effective May 21, 2011 (at 12:01 a.m. Prevailing Time at the address shown in Item 1 of the Declarations)

forms a part of Policy No. 60703940 issued to International Business Machines Corporation by Chartis Excess Limited

## RETAINED LIMIT ENDORSEMENT
**(DEFENSE EXPENSES OUTSIDE RETAINED LIMIT)**

It is hereby understood and agreed as follows:

1. In the event of exhaustion of the aggregate limits of liability of the Underlying Policies, the limits of liability of this Policy shall apply in excess of the sum of:
   a. the total amount of any self-insured retentions under the Underlying Policies that continue to apply after exhaustion of the aggregate limits of liability of the Underlying Policies; and
   b. a Retained Limit of US$150,000,000 per occurrence.

The Retained Limit: (1) shall be uninsured, except by insurance specifically written to cover such Retained limit; and (2) shall be reduced or exhausted only by the payment of amounts on account of occurrences, claims or losses that are covered under this Policy. The payment of amounts for defense expenses shall not reduce or exhaust the Retained Limit.

2. The Insurer shall have the right, but not the duty, to assume charge of the defense or settlement of any claim or suit that the Insurer has determined is reasonably likely to exceed the Retained Limit. If the Insurer can settle the claim for an amount in excess of the Retained Limit, upon written request from the Insurer, the Insured shall tender such portion of the Retained Limit as the Insurer may deem necessary to complete the settlement. If the Insurer does not exercise the right to assume charge of such defense or settlement, the Insurer shall have the right and shall be given the opportunity to associate effectively with the Insured in the defense and control of any claim or suit likely to involve this Policy.

All other terms, conditions and exclusions remain unchanged.

**AUTHORIZED REPRESENTATIVE**

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**CHARTIS EXCESS LIMITED IS REGISTERED IN IRELAND AND REGULATED BY THE IRISH FINANCIAL SERVICES REGULATORY AUTHORITY.**
**REGISTERED OFFICE:** 30 NORTH WALL QUAY, IFSC, DUBLIN 1, IRELAND. **REGISTRATION NO. 279452**