**End. 129(a)-2/97**
**Form 005**

**ADDITIONAL/RETURN PREMIUM $38,500**

**EXTENDED COVERAGE B LAYER ENDORSEMENT**

The Named Insured as of the Effective Date through and including 21st May, 1998 (Termination Date) shall be afforded extended Coverage B for the layer set forth below. Any notice of Occurrence (including any Notice of Integrated Occurrence) given in the future in respect of such Coverage B layer shall be deemed to have been given immediately before the expiration date of the applicable Coverage A, namely:

Layer: $100M xs $245M

provided, however, that, all Occurrences for which there is coverage hereunder, including any further extensions of this endorsement, collectively, shall be subject to an aggregate limit equal to the per Occurrence limit for the layer set forth above; provided, further, that, without limiting the foregoing, all Occurrences under ongoing Coverage A and Coverage B combined shall be subject to the Annual Period aggregate limits stated in Items 2(b) and (c) of the Declarations (as amended, if applicable) in effect at the time notice of such Occurrence actually is first given; e.g., if the Named Insured changes Coverage A from $100 million per Occurrence and in the aggregate excess of $100 million to $100 million per Occurrence excess of $125 million and buys Coverage B with respect to the layer $25 million excess of $100 million, then, unless the aggregate limit in Item 2(b) of the Declarations is increased at the same time, a subsequent Occurrence for which coverage is available under both Coverages A and B would nonetheless be subject to the $100 million aggregate limit.

Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, exclusions or limitations of the Policy referenced below, except as expressly stated herein.

The effective date of this Endorsement is 21st May, 1997
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. IBM-5103/5
A.C.E. INSURANCE COMPANY, LTD.

Issued to: INTERNATIONAL BUSINESS MACHINES CORPORATION
Date of Issue: 10th October, 1997
By Authorized Representative

End No. 3