**Insured:** INTERNATIONAL BUSINESS MACHINES CORPORATION  
**Policy No.:** XLUMB-00704  
**Endorsement No.:** 15  
**Effective Date:** MAY 21, 1997  

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**DESIGNATION OF LIMITS ENDORSEMENT**

1. Notwithstanding Section II.B of the Policy, in any instance in which first notice of an Occurrence (which is not a Notice of Integrated Occurrence) ("Original Occurrence") is given where Personal Injury and/or Property Damage included in such Original Occurrence is included in an Integrated Occurrence of which Notice of Integrated Occurrence is first given at a later time, if the Ultimate Net Loss attributable to the Original Occurrence (as finally determined) exceeds the per Occurrence retention for the Annual Period in which notice of the Original Occurrence was first given, then Ultimate Net Loss arising from such Original Occurrence shall not be transferred to the later Annual Period in which the Company received first notice of the Integrated Occurrence; the Company shall pay such Ultimate Net Loss in excess of per Occurrence retention amount, which shall be subject to and erode the aggregate limit of liability (Item 2(b) of the Declarations) for the Annual Period in which notice of the Original Occurrence was first given. Nonetheless, the Ultimate Net Loss arising from the Original Occurrence shall apply as respects erosion of the per Occurrence retention (Item 2(a) of the Declarations) and, when paid by the Company, the per Occurrence limit of liability (Item 2(a) of the Declarations) in the Annual Period in which Notice of Integrated Occurrence in respect thereof was first given; provided, however, that any Ultimate Net Loss indemnified by the Company in respect of the Original Occurrence shall not erode the annual aggregate limit of liability (Item 2(b) of the Declarations) in the Annual Period in which Notice of Integrated Occurrence is first given.

2. Notwithstanding paragraph (3) of Definition III.V of the Policy, where separate Occurrences pursuant to such paragraph (3), except for the thirty (30) day limitation, would otherwise be a single Occurrence under paragraph (2) of Definition III.V, then all such separate Occurrences, combined, shall be subject to a limit of liability equal to the largest aggregate limit of liability stated in Item 2(b) of the Declarations in effect at the time of first notice of any such separate Occurrence pursuant to Article V of this Policy by any Insured.

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**X.L. INSURANCE COMPANY, LTD.**

By: **LYLE MCCOY**

Title: **VICE PRESIDENT**

Date: **JUNE 30, 1997**

Ref: **XS4-125.01**

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