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(2) based upon or attributable to any of the Insureds gaining in fact any profit, <br />remuneration, or advantage to which such Insured was not legally entitled; or <br />(3) made against any Subsidiary or its Individual Insureds based upon, arising out of, <br />directly or indirectly resulting from or in consequence of, or in any way involving: <br />(a) any Wrongful Act occurring prior to the date the entity became a <br />Subsidiary; or <br />(b) any Wrongful Act occurring subsequent to the date the entity became a <br />Subsidiary that, together with a Wrongful Act occurring prior to the date <br />the entity became a Subsidiary, would constitute Interrelated Wrongful <br />Acts; or <br />(c) any Wrongful Act occurring subsequent to the date the entity ceased to <br />be a Subsidiary; or <br />(4) by, at the behest of, or on behalf of the Organization; provided, however, this <br />Exclusion will not apply to any derivative action brought totally independently of, <br />and without the solicitation, assistance, participation or intervention of, any of the <br />Insureds. <br />Any fact pertaining to or knowledge possessed by any Individual Insured will not be <br />imputed to any other Individual Insured for the purposes of determining the applicability <br />of Exclusions B. (1) and B. (2). <br />IV. LIMIT OF LIABILITY AND RETENTION <br />A. A Retention in the amount shown in Item 4. of the Declarations Page will be paid by the <br />Insureds for each Claim as determined under Clause VII.B.. The Insureds will pay the <br />Retention amount for Loss or Defense Costs or a combination of the two, whichever first <br />becomes due, before the Insurer will be obligated to make payments under this Policy. <br />B. After payment of the Retention, the Insurer will pay: <br />(1) Loss resulting from each Claim up to the Limit of Liability in each Policy Period. <br />The amount shown in Item 3. of the Declarations Page will be the maximum <br />aggregate Limit of Liability of the Insurer in each Policy Period for all Loss <br />resulting from all Claims made against the Insureds during such Policy Period, <br />regardless of the number of Claims, the number of Wrongful Acts, the number <br />of persons or entities bringing Claims, or the number of persons or entities who <br />are Insureds; and <br />(2) Defense Costs resulting from a Claim. Defense Costs paid by the Insurer will <br />not reduce the Limit of Liability in any Policy Period. However, the Insurer will <br />not be obligated to defend any Claim or to pay Loss or Defense Costs in any <br />Policy Period after the Limit of Liability has been exhausted by payment of Loss. <br />V. SETTLEMENTS AND COOPERATION <br />A. The Insurer has the right to negotiate the settlement of any Claim, as it deems <br />expedient, whether within or above the Retention, but will settle the Claim only with the <br />Insured's consent. If the Insureds refuse to consent to any settlement recommended by <br />the Insurer, the Insureds will thereafter be obligated to negotiate or defend such Claim <br />independently of the Insurer. Subject to the Limit of Liability, the Insurer's liability for <br />such Claim is limited to the amount in excess of the Retention that the Insurer would <br />have contributed to the settlement had the Insureds consented to settlement plus <br />Defense Costs covered by the Policy incurred up to the date of si <br />Risk Mougmad Division <br />E <br />° REVIEWED & APPROVED BY. <br />PSNP1001 (01/01)�Aeevaa <br />'�--'Rfsk Management Specialist <br />