**SECTION IV – CONDITIONS**

**A. CANCELLATION CLAUSE**

1. This policy may be canceled by the First Named Insured stated in Item 1. of the Declarations Page either by mailing or delivering advance written notice to the Insurer stating when the cancellation is to take effect. This policy may be canceled by the Insurer by mailing written notice to the First Named Insured at the address shown in Item 1. of the Declarations Page, stating when, not less than sixty (60) days thereafter, or ten (10) days thereafter if cancellation is for non-payment of premium, such cancellation is to take effect. Proof of mailing the notice of cancellation will suffice as proof of notice, and the effective date of cancellation stated in the notice will become the policy expiration date. Delivery of written notice either by the First Named Insured or by the Insurer shall be equivalent to mailing. If the First Named Insured cancels, earned premium will be computed in accordance with the customary short-rate table and procedure. If the Insurer cancels, earned premium will be computed pro rata based on the time this policy was in force. The Insurer will always be entitled to receive or keep the percentage of minimum earned premium stated in Item 6. of the Declarations Page.

2. An adjustment of premium may be made at the time of cancellation or as soon as practicable thereafter, but the cancellation will be effective even if the Insurer has not made or offered any refund due. The Insurer's or its representative's check, mailed or delivered to the First Named Insured, will be sufficient tender of any refund due.

3. The First Named Insured stated in Item 1. of the Declarations Page will act on behalf of all other Insureds with respect to the giving and receiving of notice of cancellation and the receipt of any refund that may become payable under this policy.

**B. ASSISTANCE AND COOPERATION**

1. The Insurer shall have the right and shall be given the opportunity to associate with the Insured in the defense of any claim, suit or proceeding relative to an occurrence where the claim, suit or proceeding involves or appears reasonably likely to involve the Insurer; in which event the Insured and the Insurer shall co-operate in all things in the defense of such claim, suit or proceeding.

2. Notwithstanding the foregoing, the Insurer will have the right and duty to defend any claim made or suit brought or proceeding instituted against the Insured to which this Policy applies if:

   i. The "Followed Underlying Policy(ies)" as stated in Item 4. b. of the Declarations Page provides for the insurer's right and duty to defend any claim, suit or proceeding, and;
   ii. The applicable limits of "Scheduled Underlying Insurance" as stated in Item 4. of the Declarations Page have been exhausted in accordance with Section I – Coverage.

3. The Insured shall not, except at its own expense, settle any claim or suit or incur any defense costs and expenses for any amount to which this Policy applies without the Insurer's prior written consent.

**C. APPEALS**

If the Insured or the Insured's "Scheduled Underlying Insurance" does not appeal a judgment in excess of the total applicable limits of "Scheduled Underlying Insurance", the Insurer may elect to do so. If the Insurer appeals, it will be liable, in addition to the applicable limits of liability of this Policy, for all court costs, expenses incurred and interest on that amount of any judgment which does not exceed the applicable limits of liability of this Policy incidental to such an appeal.

**D. MAINTENANCE OF UNDERLYING INSURANCE**

While this Policy is in effect, the Insured agrees to maintain the "Underlying Policies" in full force and effect. The Insured's failure, or the failure of others, to comply with this Condition D. will not invalidate

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