# Zurich-American Insurance Group

## DEDUCTIBLE AGREEMENT
**SELF-INSURER:** IBM CORPORATION

### b. All Allocated Claim Expense as established and determined by the Company and as stated in the Information Pages of this Agreement, defined as the estimated reserves for legal expense, excluding the usual and normal cost of investigation and adjustment of claims by salaried employees, but including independent adjuster's fees, attorney's fees, court cost, interest (both pre and post judgement), expense for expert testimony, examination, x-ray, autopsy or other medical expense of any kind not incurred for the benefit of any claimant and any other expenses incurred provided that only those items of expense shall be included which can be directly attributed to a specific claim, and

### c. All other insurance related expenses, assessments, taxes, fines or penalties which are charged or assessed by any administrative, regulatory or governmental authority or court of competent jurisdiction as a direct liability against any policy listed in the Information Pages of this Agreement.

### 4. Liability of Self-Insurer.
The Liability of the Self-Insurer shall follow that of the Company in all respects, subject to the coverages, terms, conditions and endorsements of the policies listed in the Information Pages of this Agreement.

### B. INDEMNITY AGREEMENT
The Self-Insurer shall indemnify and hold the Company harmless from and against any and all liability that the Company may incur by reason of the issuance of the policies listed in the Information Pages of this Agreement, including but not limited to liabilities arising from the investigation, defense or settlement of any loss, claim, suit, action or other proceeding in connection therewith, as respects such payments for which the Self-Insurer is responsible under the terms of this Agreement.

The Company accepts no liability as respects claims for damages that are payable within the Deductible Amounts except to the extent that actions or omissions of the Company result in negligence, willful misconduct or bad faith awards that are determined to be its sole responsibility. This exception does not apply in circumstances where the course of action leading to the finding of negligence, willful misconduct or bad faith was taken by the Company at the behest of the Self-Insurer or any other party with an interest in the outcome of such course of action. The payment of such awards, regardless of amount, are the responsibility of the Self-Insurer.

IBM 063054

Form DUDA Edition 4 (12/89)
25-Mar-91