The Subsidiary Alliance System was a strategy employed by Lord Wellesley, the British Governor-General of India, in the early 19th century to establish British control over Indian princely states. The correct answer, option 2, states that the ally was free to enter into agreements with other rulers or engage in warfare and is not included in the terms and conditions of the Subsidiary Alliance System.

Option 1 states that the British would protect their ally. This is a key aspect of the Subsidiary Alliance System, as it ensured the security of the ally and acted as a deterrent against potential attacks from enemies.

Option 3 states that in the territory of the ally, a British armed contingent would be stationed. This was a critical requirement of the Subsidiary Alliance System, as it allowed the British to maintain a military presence in the ally`s territory, ensuring control and stability.

Option 4 states that the ally would have to provide resources for the maintenance of the British armed contingent. This was also a key condition of the Subsidiary Alliance System, as it helped to ensure the financial burden of maintaining the British military force was shared by the ally.

In summary, option 2 is the correct answer as it correctly identifies a condition