**DEFENSE - SUPPLEMENTAL PAYMENT**

It is understood and agreed that Section III, definition of ultimate net loss, is amended to include the following:

If, however, with respect to any claim or suit, all underlying policies and co-insuring policies in this layer provide that claim costs paid under their respective policies are in addition to that policy's limits of liability, it is agreed that any claim costs paid under this policy on account of such claim or suit shall be in addition to this policy's limits of liability, subject to the following terms:

In the event that the amount of loss sustained by the Insured on account of any claim or suit is in excess of the insurance afforded by the Underlying Insurance for such loss, the company shall pay, in addition to the limits of liability applicable to such loss, a pro rata share of the claim cost sustained or incurred by the insured on account of such claim or suit, in the proportion that the amount of loss covered by this insurance bears to the total ultimate net loss.

**Effective Date of Endorsement:** 5/21/93  
**Endorsement No.:** 3  
**(12:01 A.M. Standard Time)**

All other terms and conditions of this policy remain unchanged.

**CLC: RG-12/91**

**DC: bsp 6/8/93**

**Authorized Representative**

**INSURED COPY**