# Zurich-American Insurance Group

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

### d. Contingencies, plus
### e. Other obligations of the Self-Insurer, minus
### f. Total Payments received by the Company.

### G. POLICY PERIOD COVERED BY THIS AGREEMENT; POLICIES INCLUDED IN THIS AGREEMENT
1. The policy period covered by this Agreement is as stated in the Information Pages of this Agreement.
2. Additional policy periods may be added to this Agreement by the issuance of Renewal Information Pages to form a part hereof.
3. Policies and policy numbers included in this Agreement are as stated in the Information Pages of this Agreement.

### H. COLLATERAL - LETTER OF CREDIT
1. **Initial Letter of Credit.**
   On or before the inception date for each policy period subject to this Agreement, the Self-Insurer shall deposit with the Company a clean irrevocable Compromise Letter of Credit having a term of twelve (12) months, in exactly the form attached hereto which conforms with the State of New York Insurance Department regulations, from a bank acceptable to the Company which is a member of the Federal Reserve System or chartered by the State of New York, in such amount as determined by the Company and stated in the Information Pages of this Agreement.

2. **Replacement Letter of Credit.**
   If the issuing bank notifies the Company on or before sixty (60) days prior to the expiration of a Letter of Credit that it elects not to renew said Letter of Credit, the Self-Insurer shall then deposit with the Company a Replacement Letter of Credit in at least an equal amount subject to all of the foregoing terms and conditions, at least thirty (30) days prior to such expiration.

3. **Amended Letter of Credit Amounts.**
   For each policy period subject to this Agreement, if at any time the Company determines that the amount of the Letter of Credit is deficient, computed in a manner consistent with that described in the Information Pages of this Agreement, the Company may demand, and upon receipt of such demand, the Self-Insurer shall deposit a Letter of Credit Amended to cover the amount of such deficiency within thirty (30) days.

**Form DUDA Edition 4 (12/89)**

**IBM 063057**

**25-Mar-91**