# Zurich-American Insurance Group

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

### a. At any time the Company determines the deposit is deficient, the Self-Insurer shall pay the amount of such deficiency within ten (10) days of receipt of the Company’s demand therefore, and

### b. At such time, as established and determined at the sole discretion of the Company, the deposit exceeds the residual outstanding reserves for loss and Allocated Claim Expense, the Company may credit future payments on those outstanding items against the balance remaining in the deposit, and

### c. At such time, as established and determined by the Company, that all losses are closed and final, any balance remaining in the deposit shall be credited or returned to the Self-Insurer; and

### d. Upon termination of this Agreement except as otherwise provided in Section I. of this Agreement, the balance remaining in the deposit shall be credited against any amount then due and payable by the Self-Insurer.

### M. PAYMENT OF FEES, PREMIUMS AND DEPOSITS

Payments are due on or before the installment dates stated in the Information Pages of this Agreement.

### N. CONTINGENCIES

In the event that the Company incurs unforeseen obligations or liabilities as the result of the issuance of policies subject to this Agreement, such as, but not limited to:

1. Premium Taxes,
2. Residual Market Subsidies, or
3. Except as a result of negligence on the Company’s part, administrative, regulatory, statutory or court ordered expenses, assessments, taxes, fines or penalties.

The Self-Insurer shall pay to the Company, within ten (10) days of receipt of demand therefore, all sums as hereinbefore described.

### O. RIGHT OF OFFSET

The Company and the Self-Insurer may offset any balance(s) due from one to the other under the terms of this Agreement.

IBM 063082

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