# Non-Premium Endorsement

**Date Prepared:** 05/21/92 sb  
**Endorsement No.:** 7

**Issued by:**
- The Home Insurance Company (X)  
- City Insurance Company (□)  
- The Home Indemnity Company (□)  
- The Home Insurance Company of Indiana (□)

**Policy Number:** HXL-F 86 48 40  
**Certificate Number:**  
**Named Insured:** International Business Machine Corp.

**Producer:** Johnson & Higgins of New York Inc.  
**Producer No.:** OPC  
**Producer No.:** 50138-081

**Policy Period:**
- **Inception (Month-Day-Year):** 05-21-92  
- **Expiration (Month-Day-Year):** 05-21-93  
- **Effective Date and Time of Endorsement:** 05-21-92

It is agreed that this policy is hereby amended as indicated. All other terms and conditions of this policy remain unchanged.

---

It is further agreed that condition 4, Defense, of this policy is hereby deleted and replaced by the following:

The Company shall not be required to assume charge of the investigation, settlement or defense of any claim made, or suits brought, on proceedings instituted against the Insured, but shall have the right and be given the opportunity to be associated in the defense and trial of any such claim, suits or proceedings relative to any claim made which, in the opinion of the Company, may create liability on the part of the Company under the terms of this policy.

Court costs and interest, if incurred with the consent of the Company, shall be borne by the Company and other interested parties in the proportion that each party's share of the Ultimate Net Loss bears to the total amount of Ultimate Net Loss sustained by all interested parties.

b) Where the underlying insurance does not provide that the limits of liability shall be reduced by expenses, including expenses incurred by or on behalf of the Insured in the investigation, negotiation, settlement and defense of any claim, then the limits of liability of this policy shall not be reduced by such expenses, and the term "Ultimate Net Loss" shall mean:

The amount payable in settlement of the Liability of the Insured after making deduction for all recoveries and for other valid collectible insurance, excepting however the policy(ies) of the Underlying Insurer.

Ultimate Net Loss shall exclude all interest accruing after entry or judgment, costs and expenses, except with the consent of the Company.

THIS ENDORSEMENT SHALL NOT APPLY IN THE STATE OF NEW YORK.

Page Two of Two

**Signature of Authorized Representative**

**H22300 F (ST) 11/81**

**The Home Insurance Companies**

**INSURED COPY**