# LOSS PAYABLE

24. The Company's obligation to pay any ultimate net loss for any accident or occurrence falling within the terms of this policy of insurance shall not attach until the amount of applicable underlying limit has been paid by or on behalf of the Assured or until the Assured's obligation to pay such amounts shall have been finally determined, either by judgment against the Assured after the actual trial or by written agreement of the Assured, the claimant, and the Company.

## SUBROGATION AND SALVAGE

25. All salvages, recoveries, or payments recovered or received subsequent to a settlement under this policy shall be applied as if recovered or received prior to such settlement and all necessary adjustments shall then be made between the Assured and the Company, provided always that nothing in this clause shall be construed to mean that losses under this Policy are not recoverable until the Assured's ultimate net loss shall have been finally ascertained.

26. It is agreed that in the case of any payment made hereunder, the Company may act together with all other interests (including the Assured) in the exercise of any rights of recovery with respect to the loss paid by the Assured, Underwriters on the underlying insurances, and the Company. The apportionment or any amounts which may be recovered from third parties shall follow the principle that any interest (including that of the Assured) that shall have paid an amount over and above any payment hereunder by the Company shall first be reimbursed to the amount paid thereby; the Company will then be reimbursed out of any balance remaining up to the amount paid thereby and hereunder; finally, the interests (including that of the Assured) of whom this policy is in excess are entitled to claim the balance, if any. Expenses incurred in the recovery of such amounts shall be apportioned between the interests (including the Assured) concerned in the proportion that their respective recoveries are finally settled.

# DEFINITIONS

27. "Ultimate Net Loss" as used herein shall be understood to mean the sums paid in settlement of losses for which the Assured is liable after making deductions for all recoveries, salvages and other insurances (other than recoveries under the underlying insurance, policies of co-insurance on this layer, or policies specifically in excess hereof), whether recoverable or not, and shall exclude all costs. However, nothing contained herein shall be construed to mean that the Assured shall be required to enforce by legal action any right of subrogation, salvage or indemnity before the Company shall pay any loss covered hereunder.

28. "Costs" as used herein, shall be understood to mean interest on judgments, investigation, adjustment and legal expenses, including taxes, court costs and premiums on bonds for which the Assured is not covered by the underlying insurance.