C. Defense costs to which this Policy applies shall not reduce the limits of liability stated in A. and B. above, except to the extent defense costs covered under the Followed Policy reduce the limits of liability of the Followed Policy.

### III. RETENTION

A. The Limits of Liability stated in Item 5 of the Declarations of this Policy apply in excess of:

1. The total of the limits of liability of the Underlying Policies applicable on a per occurrence, per claim or per loss basis, but in no event in an amount less than the total of the per occurrence, per claim or per loss limits of liability of the Underlying Excess Policies stated in Item 6 of the Declarations of this Policy.

2. The total of the limits of liability of the Underlying Policies applicable on an aggregate basis, where an amount is shown in the aggregate limit of liability of the Underlying Policies stated in Item 6 of the Declarations of this Policy, but in no event in an amount less than the aggregate limits of liability of the Underlying Excess Policies stated in Item 6 of the Declarations of this Policy.

3. The self-insured retention under the Followed Policy, if any, where the aggregate limits of liability determined in 2. above, has been exhausted.

B. This Policy will not apply in excess of any reduced or exhausted limits of liability of the Underlying Policies to the extent that such reduction or exhaustion is caused by:

1. Payment of amounts on account of occurrences or claims that are not covered under this Policy; or

2. Uncollectibility in whole or in part of the limits of liability of an Underlying Policy.

C. Notwithstanding B.I. above, defense costs incurred by the Underlying Policies shall not reduce the limits of liability of such Underlying Policies, except to the extent defense costs incurred by underlying insurance, including self-insured retentions, reduce the Insured's retained limit of liability under the Followed Policy.

### IV. EXCLUSIONS

This Policy shall not apply to:

A. ASBESTOS

Any liability arising directly or indirectly out of asbestos or asbestos-containing materials.

B. EMPLOYMENT-RELATED PRACTICES LIABILITY

Any liability arising out of any refusal to employ, termination of employment, coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or other employment-related practices, policies, acts or omissions.