# Zurich-American Insurance Group

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

### E. PROMISE TO PAY

The Self-Insurer promises to pay the Company the Principal Sum stated in the Schedule of Principal Sum Amounts for each policy period. The Self-Insurer agrees to pay the Principal Sum in accordance with the terms of this Agreement, but in any event, the entire Principal Sum shall be due and payable within ten (10) days of the termination of this Agreement, except as otherwise provided in Section I. of this Agreement.

In the event that any payment required by this Agreement is not made on or before its due date, then the Company may, without further notice or demand, declare the entire Principal Sum, or any portion thereof, immediately due and payable. The entire Principal Sum shall be immediately due and payable if the Self-Insurer fails to deposit with the Company proper Collateral, as described in Section H. of this Agreement, to guarantee payment of the Self-Insurer's obligations hereunder.

The Self-Insurer shall pay all expenses incurred by the Company to collect the Principal Sum, or any portion thereof, or to enforce any of the provisions of this Agreement.

### F. AMENDMENT OF PRINCIPAL SUM

1. It is a condition of this Agreement that the Principal Sum for each policy period shall at all times be not less than an amount computed by the Company in a manner consistent with that described in the Information Pages of this Agreement.

Therefore, for each policy period subject to this Agreement, if at any time the Company determines that a Principal Sum for that policy period is deficient, the Company may amend the Principal Sum for that policy period effective as of the date such deficiency was discovered.

2. Annual Amendment of Principal Sum.

Otherwise, for each policy period subject to this Agreement, annually beginning with losses valued as of eighteen (18) months after the inception date of such policy period, the Amended Principal Sum shall be computed by the Company as follows:

a. Fixed Fee, plus

b. Losses Subject to the Deductible Amounts, including an allowance for losses incurred but not reported, but no more than the Deductible Aggregate Amount, where applicable, times the Variable Fee Factor, plus

c. Excess Loss Premiums for Deductible Aggregate Amount Limitation, plus

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

IBM 063076
26-Mar-91