# III - LIMITS OF INSURANCE

The "Company" shall be liable only to pay sums up to the Limits of Insurance in Item 3. of the Declarations, subject to satisfaction of the retentions as provided in Section II – RETENTION above. The aggregate Limits of Insurance in this Policy apply in the same manner as the aggregate Limits of Insurance in the "Followed Policy".

## IV - CONDITIONS

### 1. MAINTENANCE OF UNDERLYING INSURANCE

It is a condition of this Policy that the "Underlying Policy(ies)" shall be maintained in full force and effect, except for any reduction of the aggregate limits contained therein solely by payment by "Underlying Policy(ies)" or the "Insured", of any loss(es) covered by this Policy. In the event of the "Insured"s failure to maintain the "Underlying Policy(ies)" in full force and effect and except with respect to the aforementioned aggregate reduction, coverage hereunder shall not be invalid, but shall apply to the same extent that it would have applied had there been compliance with this condition.

### 2. DEFENSE, ASSISTANCE AND COOPERATION

#### 1. The "Company" shall have no duty to assume charge of the defense of any claim, suit or settlement of any claim against the "Insured"; however, the "Company" will assume the defense of a suit brought against the "Insured" seeking damages to which this Policy applies if both of the following requirement are satisfied:

- (a) All applicable "Underlying Limits" have been exhausted by actual payment of damages by "Underlying Policy(ies)" or the "Insured" as provided in this Policy; and
- (b) The terms and conditions of all "Underlying Policy(ies)" and "Quota Share Policy(ies)" would have obligated all underlying insurers to assume the defense or settlement of such claim or suit, but for the exhaustion of their applicable limits of insurance.

#### 2. Except as provided in Subparagraph 1. above, the "Company" shall have the right, but not the duty, to associate with the defense of any claim, suit or settlement of any claim against the "Insured" which appears reasonably likely to involve this Policy.

#### 3. With respect to any claim or suit encompassed by Subparagraphs 1. or 2. above, the "Insured" and the "Company" shall cooperate in the defense of such claim or suit.

#### 4. The "Insured" shall not settle any claim or suit for an amount within the "Company's" limit of insurance without the "Company's" prior written consent, which consent shall not be unreasonably withheld.

#### 5. Notwithstanding the foregoing, the "Company" shall not be obligated to defend any claim or suit after the applicable Limits of Insurance of this Policy have been exhausted.

### 3. CANCELLATION

The cancellation and non-renewal provisions of this Policy will follow the cancellation and non-renewal provisions of the "Followed Policy" except as provided by endorsement to this policy.

### 4. NOTICE OF OCCURRENCE, CLAIM OR LOSS

Whenever the "Insured" has information from which they may reasonably conclude that an Occurrence, Claim or Loss covered hereunder involves injuries or damages which, in the event that the "Insured" should be held liable, is likely to involve this Policy, notice shall be sent to the "Company" as provided in item 6 of the Declarations as soon as practicable.

### 5. UNDERLYING AND QUOTA SHARE – NON DROP DOWN PROVISION

Notwithstanding the terms, conditions, exclusions and limitations of this Policy, if either: