(3) Should, however, the sum for which the said claim or suit may be settled exceed the underlying insurance limit or limits, then the Company, if it approves such settlement or consents in writing to the proceedings continuing, shall contribute to the costs incurred by the Insured in the ratio of its proportion of the ultimate net loss, as finally adjusted, bears to the whole amount of such claim or net loss.

(4) In the event the Insured elects not to appeal a judgement in excess of the underlying insurance limit or limits, the Company may elect to conduct such appeal at its own cost and expense and shall be liable for the taxable court costs and interest incidental thereto, but in no event shall the total liability of the Company exceed its limit or limits of responsibility as stated herein, plus the costs of such appeal.

(5) In the event a judgement is rendered in excess of the underlying insurance limit or limits and the underlying insurer or insurers elect to appeal such judgement, the sole responsibility of obtaining an appeal bond in regard to liability in any such excess of the underlying insurance limit or limits shall rest with the Insured and its underlying insurer or insurers.

**IV SPECIAL CONDITIONS**

A. Maintenance of Underlying Insurance: The limits of the underlying insurance shall be maintained by the Insured in full force and effect during the currency of this Certificate. Failure of the Insured to comply with the foregoing shall not invalidate this Certificate but in the event of such failure, the Company shall be liable only to the extent that it would have been liable had the Insured complied therewith. The Insured hereby agrees to promptly furnish the Company with a copy of the policy or policies of underlying insurance and renewals or replacements thereof including all endorsements attached thereto and to immediately forward to the Company any subsequent endorsement to the underlying insurance which provides for any change in coverage or change in premium. Any coverage afforded in policies of underlying insurance which is not made known or reported to the Company, as herein provided, shall be excluded from this Certificate.

B. Application of aggregate limits:

< If aggregate limits are specifically stated in Items 5 and 6 of the Declarations of this Certificate, then, the insurance afforded hereunder will apply in excess of reduced underlying insurance provided such reduction in the underlying insurance is solely the result of payment of claim(s) resulting from accidents or occurrences which take place during the term of this Certificate. If aggregate limits are not specifically stated in Items 5 and 6 of the Declarations, the coverage provided by this Certificate applies only with respect to each accident or occurrence for limits in excess of the amount provided for each accident or occurrence in the underlying insurance and does not apply over any reduced amount of underlying insurance in the event of exhaustion or reduction of aggregate limits (if any) in the underlying insurance.

C. Notice of Loss: The Insured shall immediately notify the Company of (a) any accident or occurrence which, in the Insured's or underlying insurer's estimate of the value of injuries or damages sought, WITHOUT REGARD TO LIABILITY, might result in a judgement in an amount sufficient to involve the Company's limits of liability hereunder, (b) any accident or occurrence with respect to which the underlying insurer has established a loss reserve equal to or greater than fifty (50) percent of said underlying insurer's limit of liability, (c) any cumulative incurred (paid and outstanding reserve) loss amounts totaling fifty (50) percent of underlying aggregate limits where annual aggregate limits apply and (d) any other accident or occurrence which seems likely to involve the insurance afforded hereunder. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the date, time, place and circumstances of the accident or occurrence, the names and addresses of each party sustaining injury or damage and a description of such injury or damage. At no time shall the Company be called upon to assume charge of the settlement or defense of any claims made or suits brought or proceedings instituted against the Insured, but the Company shall have the right and shall be given the opportunity to associate with the Insured or its underlying insurer or insurers, or both, in the control, defense and/or trial of any claims, suits or proceedings which, in the opinion of the Company, involves or appears reasonably likely to involve the Company. If the Company avails itself of such right and opportunity, the Insured, any underlying insurer or insurers and the Company shall cooperate in the control, defense and/or trial of such claims, suits or proceedings, so as to effect a final determination thereof. Failure on the part of the Insured or the underlying insurer or insurers to so cooperate shall relieve the Company, at its sole option, of liability under this Certificate.

The Insured shall be solely responsible for the investigation, settlement, defense and final disposition of any claim made or suit brought or proceeding instituted against the Insured to which this Certificate would apply and which no underlying insurer or insurers are obligated to defend. The Insured shall use diligence and prudence to settle all such claims and suits which in the exercise of sound judgement should be settled, provided, however, that the Insured shall not make or agree to any settlement for any sum, in excess of the underlying insurance, without the written approval of the Company.

The Insured shall:
(a) cooperate with the underlying insurer or insurers, as required by the terms of the underlying insurance,
(b) comply with all the terms and conditions thereof and
(c) enforce any right of contribution or indemnity against any person or organization who may be liable to the Insured, because of liability with respect to which insurance is afforded under this Certificate and the underlying insurance.

Upon termination of this Certificate for any reason, the insured shall, within the subsequent twelve (12) months, notify the Company of all claims or incidents of which the Insured has knowledge and which appear likely to involve the insurance afforded hereunder. Failure to do so will relieve the Company of any liability under this Certificate with respect to such claims or incidents.