**SECTION I - LIMITS OF LIABILITY**

1. Subject to subparagraph 3. of this paragraph B. LIMITS OF LIABILITY, the Limit of Liability set forth in Item 4. of the Declarations as the Products Completed Operations Aggregate Limit of Liability is the most we will pay for "Loss" under this policy under the products completed operations hazard, as defined in the "Designated Underlying Policy."

2. Subject to subparagraph 3. of this paragraph B. LIMITS OF LIABILITY, the Limit of Liability set forth in Item 4. of the Declarations as the Other Aggregate Limit of Liability is the most we will pay for "Loss" under this policy, except for "Loss" covered under the products completed operations hazard. However:

   a. The Other Aggregate Limit of Liability of this policy will not apply to "Loss" when the "Designated Underlying Policy" does not apply an aggregate limit of liability to "Loss," and all other "Underlying Insurance" does not apply an aggregate limit of liability to "Loss"; or

   b. The Other Aggregate Limit of Liability of this policy will apply to "Loss" in the same manner as the aggregate limit of liability in the "Designated Underlying Policy," provided all other "Underlying Insurance" also applies an aggregate limit of liability to "Loss" in the same manner as the "Designated Underlying Policy."

3. Subject to subparagraphs 3., 4. and 5. of this paragraph B. LIMITS OF LIABILITY:

   a. If the limits of liability of the "Underlying Insurance" have been reduced, by payments of "Loss" for "Insured Events" which take place during our "Policy Period," then this policy will drop down to become immediately excess of the reduced underlying limits of liability, provided all "Underlying

**Insurance" applies to "Loss" and also drops down; or

b. If the limits of liability of all "Underlying Insurance" have been exhausted by payments of "Loss" for "Insured Events" which take place during our "Policy Period," then this policy will continue in force as "Designated Underlying Policy."

c. However, when subparagraphs 6.a. or 6.b. of this paragraph B. LIMITS OF LIABILITY apply, we will not pay that portion of "Loss" that is within the underlying limits of liability of insurance which the "Insured" has agreed to fund by self-insurance or means other than insurance.

7. If any of the limits of liability of the "Underlying Insurance" apply on an aggregate basis and if any of such limits of liability have been reduced or exhausted by payments arising out of "Insured Events" which took place before our "Policy Period," this policy applies as if such payments had not been made.

8. The Limits of Liability set forth in Item 4. of the Declarations apply separately to each consecutive annual period and to any remaining period of less than twelve (12) months, starting with the beginning of our "Policy Period" set forth in Item 3. of the Declarations, unless our "Policy Period" is extended after issuance for an additional period of less than twelve (12) months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining our Limits of Liability.

**SECTION II - DEFENSE AND SUPPLEMENTARY PAYMENTS**

A. We will not be obligated to assume charge of the investigation, settlement or defense of any claims made, suits brought or proceedings instituted against the "Insured." However, we will have the right and shall be given the opportunity to participate with the "Insured" or the underlying insurers, or both, in the investigation, settlement, defense and trial of any claims, suits or proceedings relative to any "Insured Events" which appear reasonably likely to create liability on our part under the terms of this policy. We will not defend any suit after we have ex-