# Zurich-American Insurance Group

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

### 1. If the Self-Insurer fails to provide a Replacement Letter of Credit at least thirty (30) days prior to the expiration of a current Letter of Credit; or

### 2. If the Self-Insurer fails to provide an Amended Letter of Credit Amount within thirty (30) days of receipt of the Company’s demand therefore.

### 6. Surrender of Letter(s) of Credit.
For each policy period subject to this Agreement, the Company shall surrender to the Self-Insurer the Letter of Credit for that policy period at such time as the Company shall establish and determine that all losses are closed and final and payment for all outstanding obligations has been received for said policy period.

### 7. Conformance with Law.
The Letter of Credit must at all times be in conformance with pertinent law, statutes, regulations or other lawful orders of any court of competent jurisdiction or governmental authority to which this Agreement may be subject as respects an unexpected increase of the liabilities or the impairment of assets which the Company may incur as a party to this Agreement, including any changes or revisions to existing laws, statutes or regulations. The Self-Insurer shall, upon receipt of demand of the Company, take whatever steps are necessary to bring said Letter of Credit into such conformance within thirty (30) days.

## I. TERMINATION OF AGREEMENT
1. This Agreement shall automatically terminate, without further notice, concurrently with:
   a. The cancellation of one or more of the policies listed in the Information Pages of this Agreement, or
   b. A written request for termination by either party, upon the written consent of the other; or
   c. The Self-Insurer’s failure to provide a Letter of Credit, Replacement Letter of Credit or Amended Letter of Credit Amount in accordance with Section H. of this Agreement; or
   d. The Self-Insurer’s failure to remit payment due the Company on or before its indicated due date; or
   e. A material change in the ownership of the Self-Insurer; or

IBM 063059

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