End 008-12/11
Form BSF-02
Page 1 of 2

**ADDITIONAL/RETURN PREMIUM: NIL**

**DEFENSE, ASSISTANCE AND COOPERATION ENDORSEMENT**

It is hereby agreed that CONDITIONS, Paragraph 2, Assistance and Cooperation, is deleted in its entirety and replaced as follows:

**2. DEFENSE; ASSISTANCE AND COOPERATION**

**(a) The Company shall have no duty to assume charge of the defense or settlement of any claim or suit against the Insured; however, the Company shall have the right and duty to defend or settle a suit brought against the Insured seeking Damages to which this Policy applies:**

1. after all applicable limits of liability of Underlying Policy(ies) have been exhausted by actual payment of Damages to which this Policy applies; and
2. if the terms and conditions of all Underlying Policy(ies) and Quota Share Policy(les) would have obligated all underlying insurers to assume charge of the defense or settlement of such claim or suit, but for the exhaustion of their applicable limits of liability.

**(b) If subparagraphs 1. and 2. of paragraph 2.(a) above are not satisfied, the Company shall have the right but not the duty to assume charge of the defense or settlement of any claim or suit against the Insured upon exhaustion of the applicable limits of liability of the Underlying Policy(ies). If the Company has exercised such right, it may withdraw from the defense and tender the defense to the Insured upon exhaustion of the applicable Limits of Liability under this Policy. If the Company does not exercise the right to assume charge of such defense or settlement, or if the applicable limits of liability of the Underlying Policy(ies) are not exhausted, the Company shall have the right and shall be given the opportunity to associate effectively with the Insured or the underlying insurer(s) or both, in the defense, settlement and control of any claim or suit likely to involve this Policy.

The effective date of this endorsement is May 21, 2013
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. IBM-0015/BSF02
of ACE Bermuda Insurance Ltd.

Issued to:
International Business Machines Corporation

Date of Issue: May 20, 2013

By [Authorized Representatives]

End No. 7