# Zurich-American Insurance Companies

## Endorsement #1
**PG.5**

### This endorsement changes the policy. Please read it carefully.

| Policy No. | Eff. Date of Pol. | Exp. Date of Pol. | Eff. Date of End. | Agency No. | Add'l Premium | Return Premium |
|------------|-------------------|------------------|-------------------|------------|---------------|----------------|
| CGL 32 78 678 | 5/21/84 | 5/21/89 | 5/21/84 | 50-515-810 | $ | $ |

This endorsement is issued by the company named in the Declarations. It changes the policy on the effective date listed above at the hour stated in the Declarations.

**Named Insured:** INTERNATIONAL BUSINESS MACHINES CORP.
**Address (including Zip Code):** ARMONK, N.Y. 10504

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This endorsement changes such insurance as is afforded by provisions of the policy relating to the following:

### SUBROGATION

10. IN THE EVENT OF ANY PAYMENT UNDER THIS POLICY, THE COMPANY SHALL BE SUBROGATED TO THE EXTENT OF SUCH PAYMENT, TO ALL THE INSURED'S RIGHTS OF RECOVERY THEREFORE AND THE INSURED SHALL EXECUTE ALL PAPERS REQUIRED AND SHALL DO EVERYTHING THAT MAY BE NECESSARY TO SECURE SUCH RIGHTS, BUT THE COMPANY SHALL HAVE NO RIGHTS OF SUBROGATION AGAINST ANY PARENT OR OWNED OR CONTROLLED, SUBSIDIARY OR AFFILIATED COMPANIES OF THE NAMED INSURED. HOWEVER, IF THE COMPANY IS SUBROGATED AS AFORESAID, THE COMPANY WILL MAINTAIN ITS SUBROGATION RIGHTS; IT MAY REQUIRE AGAINST ANY RESPONSIBLE PARTY BY REASON OF ANY PAYMENT MADE. THE COMPANY WILL ACT IN CONCERT WITH ALL OTHER INTERESTS CONCERNED (INCLUDING THE INSURED) IN THE EXERCISE OF SUCH RIGHTS OF RECOVERY. IF ANY AMOUNT IS RECOVERED AS A RESULT OF SUCH PROCEEDINGS SUCH AMOUNT SHALL BE APPORTIONED AS FOLLOWS:

ANY INTEREST (INCLUDING THE INSURED) THAT SHALL HAVE PAID AN AMOUNT OVER AND ABOVE ANY PAYMENT MADE UNDER THIS POLICY SHALL BE REIMBURSED UP TO THE AMOUNT PAID BY SUCH INTEREST; THE COMPANY SHALL BE REIMBURSED OUT OF THE BALANCE THEN REMAINING, UP TO THE AMOUNT PAID UNDER THIS POLICY, THE INSURED IS ENTITLED TO THE RESIDUE. THE EXPENSE OF ALL PROCEEDINGS NECESSARY TO THE RECOVERY OF ANY SUCH AMOUNT SHALL BE APPORTIONED BETWEEN THE INTERESTS CONCERNED (INCLUDING THE INSURED) IN THE RATIO OF THEIR RESPECTIVE RECOVERIES AS FINALLY SETTLED. IF THERE SHOULD BE NO RECOVERY IN PROCEEDINGS INSTITUTED SOLELY ON THE INITIATIVE OF THE COMPANY, THE EXPENSE THEREOF SHALL BE BORNE BY THE COMPANY.

Countersigned:  
Authorized Representative  
U-CA-161-A (7-81 ed)