**Insured:** International Business Machines Corp.

**Policy No.:** UFP0021773-00

**Endorsement No.:** 2

**Effective Date:** May 21, 2007

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### ARBITRATION AND CHOICE OF LAW ENDORSEMENT

In consideration of the premium charged, it is agreed that the following are added to this Policy, notwithstanding anything to the contrary in the Followed Policy:

raise any defenses under this Policy and any other defenses, other than jurisdiction defenses, as it would have been entitled to raise in the action or proceeding with such insurers.

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#### 2. CHOICE OF LAW

This Policy shall be construed in accordance with the internal laws of the State of New York (with the exception of: (a) the insurability of punitive damages, which shall be insurable under this Policy regardless of whether punitive damages are uninsurable under the Followed Policy by reason of applicable law and (b) the procedural law required by Paragraph 1. of this Endorsement which shall be construed in accordance with the laws of the United Kingdom); provided, however, that, notwithstanding any legal principals to the contrary, the warranties, terms, conditions, exclusions and limitations of this Policy are to be construed in an evenhanded fashion between the Insured and the Company. Without limitation, where the language of this Policy is deemed to be ambiguous or otherwise unclear, the issues shall be resolved in the manner most constituent with the warranties, terms, conditions, exclusions and limitations viewed as a whole (without regard to authorship of the language and without any presumption or arbitrary interpretation or construction in favor of either the Insured or the Company.)

All other terms and conditions of this Policy remain unchanged.

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**Arch Reinsurance Ltd.**

By: _______________________

Title: Senior Vice President

Underwriting Manager

Excess Casualty

Date: September 6, 2007

Ref: OCXS 4001 Ed. 4/1/02

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