# References to which this policy applies shall not exceed the limit of liability stated in Item 4 of the declarations as "aggregate".

## V Definitions

When used in this policy (including endorsements forming a part hereof):

- **"controlling underlying insurance policy"** means the insurance policy designated as such in Item 6 of the declarations;
- **"costs"** means interest on judgments, and investigation, adjustment and legal expenses including taxed court costs and premiums on bonds, for which the insured is not covered by underlying insurance (excluding (a) all reasonable compensation paid to employees and counsel on general retainer, (b) all office expenses of the insured, and (c) regular fees paid to counsel on general retainer);
- **"first named insured"** means the person or organization first named in Item 1 of the declarations of this policy;
- **"insured"** means any person or organization qualifying as an insured in the "Persons Insured" provision of this policy. The insurance afforded applies separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the company's liability;
- **"named insured"** means the first named insured and any other person or organization named in Item 1 of the declarations of this policy or in an endorsement amending such Item 1;
- **"occurrence"** means an accident or occurrence as defined in and covered by the controlling underlying insurance policy designated in the declarations;
- **"ultimate net loss"** means the total of all sums which the insured, or any organization, its insurer, or both, shall become legally obligated to pay, wholly or in part, by reason of adjudication or settlement because of an occurrence covered under the terms of the controlling underlying insurance policy and to which this policy applies; but "ultimate net loss" does not include the amount of any recoveries, salvages or other insurance (other than underlying insurance or insurance written specifically to apply in excess of this policy), whether collectible or not, or (b) costs;
- **"underlying insurance"** means the primary or excess insurance policies contributing to the total limit stated in Item 5 of the declarations (including any deductible amount, insured's participation or self-insurance retention, and such policies indexed by years or replacements thereof). The limits of such policies shall be deemed to be applicable regardless of (1) any defense which the underlying insurer may assert, (2) the insured's failure to comply with any condition of any such policy or (3) the insolvency of the underlying insurer.

## Conditions

### 1. Premium

The premium for this policy shall be as stated in Item 3 of the declarations and be payable by the first named insured.

### 2. Maintenance of Underlying Insurance

Policies affording in total the limits stated in Item 5 of the declarations shall be maintained in full effect during the currency of this policy, except for the reduction of any aggregate limits contained therein.

### 3. Notice of Occurrence

Whenever it appears that an occurrence is likely to involve indemnity under this policy, written notice thereof shall be given to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the occurrence, the names and addresses of the injured and of available witnesses.

### 4. Action Against Company

No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliance with all the terms of this policy, nor until the amount of the insured's obligation to pay shall have been determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.

Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy. No person or organization shall have the right under this policy to join the company as a party defendant against the insured to determine the insured's liability, nor shall the company be impleaded by the insured or his legal representative. Bankruptcy or insolvency of the insured or of the insured's estate shall not relieve the company of any of its obligations hereunder.

### 5. Subrogation

In the event of any payment under this policy, the company shall participate with the insured and any underlying insurer in the exercise of all insured's rights of recovery therefor against any person or organization, and the insured shall execute and deliver instruments and papers and do whatever else is necessary to effect such rights. The insured shall do nothing after loss to prejudice such rights.

Recoveries shall be applied:

First, to reimburse any interest (including the insured) that may have paid any amount with respect to liability in excess of the limit of the company's liability hereunder;

then, to reimburse the company up to the amount paid hereunder, along with any other insurers having a quota share interest at the same level; and

lastly, to reimburse such interests (including the insured), with respect to which the insurance is excess, as are entitled to claim the residue, if any;

but a different apportionment may be made to effect settlement of a claim by agreement signed by all interests. Reasonable expenses incurred in the exercise of rights of recovery shall be apportioned among all interests in the ratio of their respective losses for which recovery is sought.

### 6. Changes

Notice to any agent or knowledge possessed by any agent or any other person shall not effect a waiver or a change in any of the policy or estop the company from asserting any rights under the terms of this policy with respects to any requirement as to underlying insurance, nor shall any change in this policy be waived or changed, except by endorsement issued to formal notice of this policy, signed by an authorized representative of the company.

### 7. Assistance and Cooperation of the Insured

The insured shall cooperate with the company and with the underlying insurer, as required by the terms of the controlling underlying insurance, in the performance of all the terms and conditions thereof, and shall enforce any right of contribution or indemnity against any person or organization who may be liable to the insured, because of an occurrence and with respect to which insurance is afforded under this policy or the underlying insurance policies.