# ENDORSEMENT 1

This endorsement, effective 12:01 A.M., May 21, 1977, forms a part of policy No. GC 550 18 52 issued to International Business Machines Corporation by Lexington Insurance Company.

In consideration of the premium charged, it is agreed that the insurance afforded by this policy shall not apply with respect to liability arising out of any claim made against any insured and caused by, or alleged to have been caused, by any negligent act, error or omission of any insured, or any other person for whose actions any insured is legally responsible, in the conduct of the insured's business of data processing.

Further this insurance does not apply to damages as respects loss of unauthorised use of damage to or destruction of computer hardware or computer software (including source material, data and records) in the care, custody or control of any insured or as to which, for any reason, any insured is exercising physical control.

All other terms and conditions remain unchanged.

6/16/77 pmr

Authorized Representative