**PRODUCER'S CODE:** 31548456  
**NAME AND LOCATION:** Johnson & Higgins  
**PREVIOUS POLICY NUMBER:** XLX-1267320  
**POLICY PREFIX AND NUMBER:** XL'1364370

**BRANCH:**  
**CO.:** 01  
**ITEM 1. INSURED'S NAME AND ADDRESS (NO., STREET, TOWN, COUNTY, STATE):** International Business Machines Corp. Armonk, New York 10504  

**POLICY PERIOD:** 5-21-79 to 5-21-79  

**ITEM 2. INCEPTION (MO. DAY YR.) EXPIRATION (MO. DAY YR.)** 12:01 A.M. STANDARD TIME AT THE ADDRESS OF THE NAMED INSURED AS STATED HEREIN.

**ITEM 3. LIMIT OF LIABILITY:** $10,000,000 EACH OCCURRENCE P/O $40,000,000 AGGREGATE $10,000,000

**ITEM 4. UNDERLYING INSURANCE LIMIT OF LIABILITY:** $40,000,000 EACH OCCURRENCE $40,000,000 AGGREGATE

**ITEM 5. PREMIUM BASIS:** Flat Charge  
**ITEM 6. ADVANCE PREMIUM:** $19,200. ANNUAL MINIMUM PREMIUM: $19,200.

**IN THE EVENT OF CANCELLATION BY THE NAMED INSURED, THE COMPANY SHALL RECEIVE AND RETAIN NOT LESS THAN $ AS THE POLICY MINIMUM PREMIUM.**

**ITEM 7. SCHEDULE OF UNDERLYING INSURANCE:** See Endorsement #1

**FOLLOWING FORM BLANKET EXCESS LIABILITY POLICY**

The Company designated above, a stock insurance company (herein called the Company) agrees with the insured, named in the declarations made a part hereof, in consideration of the payment of premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy:

**INSURING AGREEMENTS**

1. **Coverage:** To indemnify the Insured for the Insured's ultimate net loss in excess of the limits of liability afforded under the Blanket Excess Liability or Umbrella policies specified in Item 7 of the Declarations, hereinafter called underlying insurance, in full force and effect at the inception of this policy, provided that the insurance for injury to or destruction of property under this policy and underlying policies shall not apply except as respects injury to or destruction of corporeal property, including loss of use thereof.
2. **Limit of Loss:** The Company shall be liable only for the limit of liability stated in Item 3 of the Declarations in excess of the limit or limits of liability of the applicable underlying insurance policy or policies all as stated in the declarations of this policy. The limit of the liability stated in the declarations as applicable to "each occurrence" shall be the total amount of the Company's liability for all damages sustained as the result of any one occurrence, provided, however, in the event of reduction or exhaustion of the applicable aggregate limit or limits of liability under said underlying policy or policies solely by reason of losses paid thereunder on account of occurrences during this policy period, this policy shall in the event of reduction, apply as excess of the reduced limit of liability thereunder. Subject to the applicable limit of liability as respects each occurrence, the limit of liability stated in the declarations as "aggregate" shall be the total limit of the Company's liability for all damages sustained during each annual period of this policy.
3. **Policy Period:** This policy applies only to occurrences which take place during the policy period.

**DEFINITIONS**

"Ultimate net loss" means all sums actually paid, or which the Insured is legally obligated to pay, as damages in settlement or satisfaction of claims or suits for which insurance is afforded by this policy, after proper deduction of all recoveries or salvage.

**CONDITIONS**

1. **Maintenance of Primary Insurance:** The Insured warrants, and it is a condition of this policy, that at the inception of this policy, insurance afforded by the underlying policies of insurance (applying) (Continued on Page Two)

**COUNTERSIGNATURE DATE:** 6-9-78 ar  
**COUNTERSIGNATURE OF AUTHORIZED AGENT:**  

**BLANKET EXCESS LIABILITY POLICY (FOLLOWING FORM)** 5902-2-72