c. The first "Named Insured" will reimburse us for expenses we incur in taking those steps we deem appropriate in accordance with paragraph b. 2) above. The duty of the first "Named Insured" to reimburse us will begin on:

1) The date on which the applicable Limit of Insurance is used up, if we sent notice in accordance with paragraph a. above; or

2) The date on which we sent notice in accordance with paragraph b. 1) above, if we did not send notice in accordance with paragraph a. above.

d. The exhaustion of any Limit of Insurance by the payments of judgments or settlements, and the resulting end of our duty to defend, will not be affected by our failure to comply with any of the provisions of this Condition.

E. Subparagraph 1., of G. INSUREDS DUTIES of SECTION V -- CONDITIONS, is deleted and replaced by the following:

1. Notice of any accident, occurrence or offense which may result in a claim under this policy shall be given to us by or on the behalf of the insured as soon as practicable. Notice given by or on the behalf of the insured, or written notice by or on behalf of the injured person or any other claimant, to any agent or broker in New York State with particulars sufficient to identify the insured shall be considered to be notice to us.

F. With respect to insurance provided in paragraph A. (SECTION I), the terms of this policy as respects coverage for operations in the State of New York shall conform to the coverage requirements of the applicable insurance laws of the State of New York or the applicable regulations of the New York Insurance Department provided, however, that the Limits of Insurance as stated in the Declarations of this policy shall be in excess of the limits of liability of any underlying insurance or self insurance as stated in the Declarations or in any endorsement attached to this policy.

G. Paragraph A. of SECTION II -- DEFENSE AND SUPPLEMENTARY PAYMENTS is deleted and replaced by the following:

A. 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 be obligated to assume charge of the investigation, settlement or defense of any claims made, suits brought or proceedings instituted against the insured relative to any "Insured Events" which appear reasonably likely to create liability on our part under the terms of this policy.

In the event the duty of the underlying insurers to defend the insured against a suit ceases solely because the applicable Limit of Insurance is used up in the payment of judgments or settlements, then we shall assume the duty for such defense even if the allegations of the suit are groundless, false or fraudulent.

We will not defend any suit after we have exhausted our applicable Limit of Liability as set forth in Item 4. of the Declarations.

H. Subparagraph 2. of SECTION IV -- DEFINITIONS is deleted and replaced by the following:

2. "Insured Events" means accidents, occurrences, offenses, or defense costs, which ever is applicable to coverage under the "Designated Underlying Policy."

I. Subparagraph 8. of B. LIMITS OF LIABILITY of SECTION I -- INSURING AGREEMENTS is replaced in its entirety by the following:

The Limits of Liability set forth in Item 4. in 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. in 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, unless the "Policy Period" is extended because we sent the first "Named Insured" an incomplete or late conditional renewal notice or a late nonrenewal notice.