Common use of Warranty; Indemnification Clause in Contracts

Warranty; Indemnification. (a) For a period of five years following the Closing Date, the Sellers (other than the Xxxxxxxx Children Sellers) shall jointly and severally, and the Xxxxxxxx Children Sellers shall severally, indemnify, defend and hold harmless Standard Pacific, Buyer and their Affiliates (including the Acquired Companies) from any Liability incurred by such Persons as a result of any Warranty Claims that relate to real property developed or homes that close escrow on or before the Closing Date, to the extent that such Liabilities exceed the sum of (i) the warranty reserve for the Acquired Companies on the Balance Sheet Date Financial Statements (prepared in conformity with GAAP, and consistent with the practices and policies of the Company in preparing the 2001 Balance Sheet), and (ii) $550,000 (the "Warranty Threshold"), subject to the Maximum Warranty Amount. The indemnity described in the immediately preceding sentence shall include, without limitation, all costs and out-of-pocket expenses (including legal and expert fees) and a reasonable allocation of labor costs for persons performing or directly overseeing the work Buyer deems reasonably necessary to address such Warranty Claims. The Sellers acknowledge that the Maximum Warranty Amount is in addition to all insurance proceeds, meaning that the Sellers shall be obligated to pay, up to the Maximum Warranty Amount, all Warranty Claims that are not paid by insurance and that exceed the Warranty Threshold. The obligation of the Sellers under this Section 6.11 shall terminate on the fifth anniversary of the Closing Date, except to the extent that Buyer notifies the Sellers' Representative in writing of a claim pursuant to this Section 6.11 on or before such date specifying the factual basis of such claim in reasonable detail to the extent then known by Buyer. The Sellers shall be obligated to promptly pay to Buyer the amount of all Warranty Claims in excess of the Warranty Threshold irrespective of whether such amounts may be potentially covered by insurance. If an amount initially paid by the Sellers with respect to a Warranty Claim is later reimbursed to Buyer by applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto, Standard Pacific shall cause Buyer to promptly reimburse Sellers for such payment (after deduction of all out-of-pocket expenses relating to seeking such payment) and the reimbursed payment will not count against the Maximum Warranty Amount or the limitations to the Sellers' liability set forth in Section 7.4(c). During the five year period referred to herein (or if earlier, until the limitations to the Sellers' liability set forth in Section 7.4(c) have been met), (A) if at any time the Sellers' Representative no longer serves as an officer of the Company, Standard Pacific shall cause Buyer to provide written notice to the Sellers' Representative of all Warranty Claims reasonably expected to result in settlement or repair expenses in excess of $25,000; (B) Buyer shall take reasonable actions to defend all Warranty Claims and to seek timely recovery with respect to such claims under applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto; and (C) the Sellers, at their sole expense, shall have the right to participate in the defense of all Warranty Claims; provided, however, that Buyer shall have the sole right to control the defense and settlement of each such Warranty Claim. (b) The aggregate maximum out-of-pocket liability of the Sellers for Warranty Claims (the "Maximum Warranty Amount"), shall equal $6,500,000, provided, however, that such amount shall be reduced to $5,000,000 if the Acquired Companies prior to the Closing Date, or the Sellers within 90 days after the Closing Date, purchase an insurance policy covering all Warranty Claims that relate to real property developed or homes sold or constructed by the Acquired Companies prior to the Closing Date, which in light of the operations of the Acquired Companies prior to the Closing Date, is in an amount and with coverages, deductibles and other terms that are reasonable and customary for entities engaged in such operations, including an aggregate loss limit of not less than $5,000,000 (the "Tail Policy"). The named insureds under the Tail Policy shall be the Acquired Companies, Buyer and Standard Pacific. If purchased by the Acquired Companies, the cost of the Tail Policy shall be borne by the Acquired Companies and such cost will be reflected in the Balance Sheet Date Financial Statements and will have the effect of decreasing the Balance Sheet Date Net Book Value by the full amount of such payment. If purchased by the Sellers, the cost of the Tail Policy shall be borne by the Sellers.

Warranty; Indemnification. 6.1. The Company will warrant all products for 60 months for any manufacturers' defects. This warrantee will be valid only if the buyer purchases a driver from the Company or purchases a driver from Xxxxxx Research that is approved by the Company. The Company's sole obligation under this warranty is limited to repairing any defective Products or, if any such Products cannot be repaired, to replacing such defective Products, without charge (a) For a period F.O.R point of five years following the Closing Datedestination), for new Products. If repairs are made to such defective Products or new Products are replaced therefore, the Sellers (Company's obligation with respect to additional shipping costs will be limited to the delivery of such repaired or new Products to the respective job site. The Company further warrants that the Products do not infringe any patent, trademark, copyright or other than property right owned by a third party. This warranty does not extend to any Product which has been misused or which has been improperly assembled or improperly stored by the Xxxxxxxx Children Sellers) Buyer. EXCEPT AS PROVIDED ABOVE, THIS WARRANTY IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. The Company shall jointly not be liable for incidental, special, exemplary, liquidated or consequential damages or for loss of profit. 6.2. The Company hereby undertakes and severally, and the Xxxxxxxx Children Sellers shall severally, agrees to indemnify, defend and hold keep and save the Buyer harmless Standard Pacificfrom and against any and all liability, Buyer claims, damages, costs and their Affiliates expenses (including reasonable attorneys' fees) of whatever character, including without limitation, any liability, claims, damages, costs and expenses related to patent, trademark or proprietary rights, or that may be claimed or asserted against the Acquired Companies) from Buyer by any Liability incurred by such Persons as a result person, firm, corporation or entity whatsoever or whomsoever on account of any Warranty Claims that relate actual or alleged injury to real person or property developed arising out of the performance by, or homes that close escrow on or before the Closing Date, to the extent that such Liabilities exceed the sum of (i) the warranty reserve for the Acquired Companies on the Balance Sheet Date Financial Statements (prepared in conformity with GAAP, rights and consistent with the practices and policies obligations of the Company in preparing the 2001 Balance Sheet)under this Agreement, and (ii) $550,000 (the "Warranty Threshold"), subject unless such damage is proven substantially due to the Maximum Warranty Amount. The indemnity described in the immediately preceding sentence shall include, without limitation, all costs and out-of-pocket expenses (including legal and expert fees) and a reasonable allocation of labor costs for persons performing or directly overseeing the work Buyer deems reasonably necessary to address such Warranty Claims. The Sellers acknowledge that the Maximum Warranty Amount is in addition to all insurance proceeds, meaning that the Sellers shall be obligated to pay, up to the Maximum Warranty Amount, all Warranty Claims that are not paid by insurance and that exceed the Warranty Threshold. The obligation proven negligence of the Sellers under this Section 6.11 shall terminate on the fifth anniversary of the Closing DateBuyer, except to the extent that Buyer notifies the Sellers' Representative in writing of a claim pursuant to this Section 6.11 on or before such date specifying the factual basis of such claim in reasonable detail to the extent then known by Buyer. The Sellers shall be obligated to promptly pay to Buyer which case the amount of all Warranty Claims in excess of the Warranty Threshold irrespective of whether such amounts may be potentially covered by insurance. If an amount initially paid by the Sellers with respect to a Warranty Claim is later reimbursed to Buyer by applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto, Standard Pacific shall cause Buyer to promptly reimburse Sellers for such payment (after deduction of all out-of-pocket expenses relating to seeking such payment) and the reimbursed payment will not count against the Maximum Warranty Amount or the limitations to the Sellers' liability set forth in Section 7.4(c). During the five year period referred to herein (or if earlier, until the limitations to the Sellers' liability set forth in Section 7.4(c) have been met), (A) if at any time the Sellers' Representative no longer serves as an officer of the Company, Standard Pacific shall cause Buyer to provide written notice to the Sellers' Representative of all Warranty Claims reasonably expected to result in settlement or repair expenses in excess of $25,000; (B) Buyer shall take reasonable actions to defend all Warranty Claims and to seek timely recovery with respect to such claims under applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto; and (C) the Sellers, at their sole expense, shall have the right to participate in the defense of all Warranty Claims; provided, however, that Buyer shall have the sole right to control the defense and settlement of each such Warranty Claim. (b) The aggregate maximum out-of-pocket liability of the Sellers for Warranty Claims (the "Maximum Warranty Amount"), shall equal $6,500,000, provided, however, that such amount indemnification shall be reduced to $5,000,000 if the Acquired Companies prior proportionately to the Closing Date, or the Sellers within 90 days after the Closing Date, purchase an insurance policy covering all Warranty Claims that relate to real property developed or homes sold or constructed degree of damage caused by the Acquired Companies prior to the Closing Date, which in light such proven negligence of the operations of the Acquired Companies prior to the Closing Date, is in an amount and with coverages, deductibles and other terms that are reasonable and customary for entities engaged in such operations, including an aggregate loss limit of not less than $5,000,000 (the "Tail Policy"). The named insureds under the Tail Policy shall be the Acquired Companies, Buyer and Standard Pacific. If purchased by the Acquired Companies, the cost of the Tail Policy shall be borne by the Acquired Companies and such cost will be reflected in the Balance Sheet Date Financial Statements and will have the effect of decreasing the Balance Sheet Date Net Book Value by the full amount of such payment. If purchased by the Sellers, the cost of the Tail Policy shall be borne by the SellersBuyer.

Warranty; Indemnification. 6.1. The Company will warrant all products for 60 months for any manufacturers’ defects. The Company’s sole obligation under this warranty is limited to repairing any defective Products or, if any such Products cannot be repaired, to replacing such defective Products, without charge (a) For a period F.O.B. point of five years following the Closing Dateuse), for new Products. If repairs are made to such defective Products or new Products are replaced therefore, the Sellers (Company’s obligation with respect to additional shipping costs will be limited to the delivery of such repaired or new Products to the respective job site. The Company further warrants that the Products do not infringe any patent, trademark, copyright or other than property right owned by a third party. This warranty does not extend to any Product which has been misused or which has been improperly assembled or improperly stored by the Xxxxxxxx Children Sellers) Buyer. EXCEPT AS PROVIDED ABOVE, THIS WARRANTY IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. The Company shall jointly not be liable for incidental, special, exemplary, liquidated or consequential damages or for loss of profit. 6.2. The Company hereby undertakes and severally, and the Xxxxxxxx Children Sellers shall severally, agrees to indemnify, defend and hold keep and save the Buyer harmless Standard Pacificfrom and against any and all liability, Buyer claims, damages, costs and their Affiliates expenses (including reasonable attorneys' fees) of whatever character, including without limitation, any liability, claims, damages, costs and expenses related to patent, trademark or proprietary rights, or that may be claimed or asserted against the Acquired Companies) from Buyer by any Liability incurred by such Persons as a result person, firm, corporation or entity whatsoever or whomsoever on account of any Warranty Claims that relate actual or alleged injury to real person or property developed arising out of the performance by, or homes that close escrow on or before the Closing Date, to the extent that such Liabilities exceed the sum of (i) the warranty reserve for the Acquired Companies on the Balance Sheet Date Financial Statements (prepared in conformity with GAAP, rights and consistent with the practices and policies obligations of the Company in preparing the 2001 Balance Sheet)under this Agreement, and (ii) $550,000 (the "Warranty Threshold"), subject unless such damage is proven substantially due to the Maximum Warranty Amount. The indemnity described in the immediately preceding sentence shall include, without limitation, all costs and out-of-pocket expenses (including legal and expert fees) and a reasonable allocation of labor costs for persons performing or directly overseeing the work Buyer deems reasonably necessary to address such Warranty Claims. The Sellers acknowledge that the Maximum Warranty Amount is in addition to all insurance proceeds, meaning that the Sellers shall be obligated to pay, up to the Maximum Warranty Amount, all Warranty Claims that are not paid by insurance and that exceed the Warranty Threshold. The obligation proven negligence of the Sellers under this Section 6.11 shall terminate on the fifth anniversary of the Closing DateBuyer, except to the extent that Buyer notifies the Sellers' Representative in writing of a claim pursuant to this Section 6.11 on or before such date specifying the factual basis of such claim in reasonable detail to the extent then known by Buyer. The Sellers shall be obligated to promptly pay to Buyer which case the amount of all Warranty Claims in excess of the Warranty Threshold irrespective of whether such amounts may be potentially covered by insurance. If an amount initially paid by the Sellers with respect to a Warranty Claim is later reimbursed to Buyer by applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto, Standard Pacific shall cause Buyer to promptly reimburse Sellers for such payment (after deduction of all out-of-pocket expenses relating to seeking such payment) and the reimbursed payment will not count against the Maximum Warranty Amount or the limitations to the Sellers' liability set forth in Section 7.4(c). During the five year period referred to herein (or if earlier, until the limitations to the Sellers' liability set forth in Section 7.4(c) have been met), (A) if at any time the Sellers' Representative no longer serves as an officer of the Company, Standard Pacific shall cause Buyer to provide written notice to the Sellers' Representative of all Warranty Claims reasonably expected to result in settlement or repair expenses in excess of $25,000; (B) Buyer shall take reasonable actions to defend all Warranty Claims and to seek timely recovery with respect to such claims under applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto; and (C) the Sellers, at their sole expense, shall have the right to participate in the defense of all Warranty Claims; provided, however, that Buyer shall have the sole right to control the defense and settlement of each such Warranty Claim. (b) The aggregate maximum out-of-pocket liability of the Sellers for Warranty Claims (the "Maximum Warranty Amount"), shall equal $6,500,000, provided, however, that such amount indemnification shall be reduced to $5,000,000 if the Acquired Companies prior proportionately to the Closing Date, or the Sellers within 90 days after the Closing Date, purchase an insurance policy covering all Warranty Claims that relate to real property developed or homes sold or constructed degree of damage caused by the Acquired Companies prior to the Closing Date, which in light such proven negligence of the operations of the Acquired Companies prior to the Closing Date, is in an amount and with coverages, deductibles and other terms that are reasonable and customary for entities engaged in such operations, including an aggregate loss limit of not less than $5,000,000 (the "Tail Policy"). The named insureds under the Tail Policy shall be the Acquired Companies, Buyer and Standard Pacific. If purchased by the Acquired Companies, the cost of the Tail Policy shall be borne by the Acquired Companies and such cost will be reflected in the Balance Sheet Date Financial Statements and will have the effect of decreasing the Balance Sheet Date Net Book Value by the full amount of such payment. If purchased by the Sellers, the cost of the Tail Policy shall be borne by the SellersBuyer.

Warranty; Indemnification. 14.1 InspireMD warrants, for a period of three (3) years from the date a Product is received by Penumbra’s customer, that the Product will: (a) For a period of five years following the Closing Datemeet all specifications; (b) be free from defects in design, the Sellers (other than the Xxxxxxxx Children Sellers) shall jointly and severallymanufacture, materials, and workmanship; (c) be of merchantable quality and fit for the Xxxxxxxx Children Sellers shall severallypurpose for which they are intended; and (d) comply with all applicable laws in effect in the place of manufacture and those laws in the Distribution Territory related to Product approval, anti-corruption and anti-bribery. 14.2 INSPIREMD’S SOLE OBLIGATION UNDER THE FOREGOING WARRANTY SHALL BE, AT INSPIREMD’S SOLE ELECTION, TO EITHER REPLACE THE RELEVANT PRODUCT OR REFUND PENUMBRA’S PURCHASE PRICE FOR THE PRODUCT. 14.3 InspireMD shall, at its expense, indemnify, defend and hold Penumbra, its subsidiaries and affiliates harmless Standard Pacificagainst all costs and liabilities incurred in connection with any third-party claim, Buyer and their Affiliates action, suit, or proceeding alleging bodily injury (including the Acquired Companiesdeath) from any Liability incurred by such Persons as a result of any Warranty Claims that relate or damage to real personal property developed or homes that close escrow on or before the Closing Date, to the extent that such Liabilities exceed claim arises out of or relates to any breach of a warranty made by InspireMD regarding the sum Products or any negligent or reckless act or omission or willful misconduct by InspireMD or any of (i) the warranty reserve for the Acquired Companies on the Balance Sheet Date Financial Statements (prepared its employees or agents. Penumbra agrees to give InspireMD prompt notice of any such claim, action, suit or proceeding of which Penumbra becomes aware and InspireMD shall have absolute control of any defense in conformity such matter. InspireMD shall keep Penumbra regularly informed regarding such action, including providing Penumbra with GAAPcopies of legal filings pertaining thereto. 14.4 Penumbra shall, at its expense, indemnify, defend and consistent with the practices hold InspireMD, its affiliates and policies each of the Company in preparing the 2001 Balance Sheet)their respective shareholders, members, managers, officers, directors, owners, agents and (ii) $550,000 representatives (the "Warranty Threshold")“InspireMD Indemnitees”) harmless against all costs and liabilities incurred in connection with any claim, subject action, suit, or proceeding arising out of: (a) Penumbra’s relationship with any sub-distributor, whether related to the Maximum Warranty Amount. The indemnity described in appointment thereof, the immediately preceding sentence shall includetermination of any sub-distributor or any other matter; (b) any negligence, recklessness or willful misconduct by Penumbra or any of its employees, agents, sub-distributors or third parties, including, without limitation, all costs and out-of-pocket expenses any violation of any law by any such party; or (including legal and expert feesc) and a reasonable allocation of labor costs for persons performing any improper use, negligent repair or directly overseeing the work Buyer deems reasonably necessary to address such Warranty Claims. The Sellers acknowledge that the Maximum Warranty Amount is in addition to all insurance proceeds, meaning that the Sellers shall be obligated to pay, up to the Maximum Warranty Amount, all Warranty Claims that are not paid by insurance and that exceed the Warranty Threshold. The obligation of the Sellers under this Section 6.11 shall terminate on the fifth anniversary of the Closing Date, except to the extent that Buyer notifies the Sellers' Representative in writing alteration of a claim pursuant Product by Penumbra. InspireMD agrees to this Section 6.11 on give Penumbra prompt notice of any such claim, action, suit or before such date specifying the factual basis proceeding of such claim in reasonable detail to the extent then known by Buyer. The Sellers shall be obligated to promptly pay to Buyer the amount of all Warranty Claims in excess of the Warranty Threshold irrespective of whether such amounts may be potentially covered by insurance. If an amount initially paid by the Sellers with respect to a Warranty Claim is later reimbursed to Buyer by applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto, Standard Pacific shall cause Buyer to promptly reimburse Sellers for such payment (after deduction of all out-of-pocket expenses relating to seeking such payment) which InspireMD becomes aware and the reimbursed payment will not count against the Maximum Warranty Amount or the limitations to the Sellers' liability set forth in Section 7.4(c). During the five year period referred to herein (or if earlier, until the limitations to the Sellers' liability set forth in Section 7.4(c) have been met), (A) if at any time the Sellers' Representative no longer serves as an officer of the Company, Standard Pacific shall cause Buyer to provide written notice to the Sellers' Representative of all Warranty Claims reasonably expected to result in settlement or repair expenses in excess of $25,000; (B) Buyer shall take reasonable actions to defend all Warranty Claims and to seek timely recovery with respect to such claims under applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior thereto; and (C) the Sellers, at their sole expense, Penumbra shall have the right to participate in the absolute control of any defense of all Warranty Claims; provided, however, that Buyer shall have the sole right to control the defense and settlement of each such Warranty Claim. (b) The aggregate maximum out-of-pocket liability of the Sellers for Warranty Claims (the "Maximum Warranty Amount"), shall equal $6,500,000, provided, however, that such amount shall be reduced to $5,000,000 if the Acquired Companies prior to the Closing Date, or the Sellers within 90 days after the Closing Date, purchase an insurance policy covering all Warranty Claims that relate to real property developed or homes sold or constructed by the Acquired Companies prior to the Closing Date, which in light of the operations of the Acquired Companies prior to the Closing Date, is in an amount and with coverages, deductibles and other terms that are reasonable and customary for entities engaged in such operationsmatter. Penumbra shall keep InspireMD regularly informed regarding such action, including an aggregate loss limit providing InspireMD with copies of not less than $5,000,000 (the "Tail Policy"). The named insureds under the Tail Policy shall be the Acquired Companies, Buyer and Standard Pacific. If purchased by the Acquired Companies, the cost of the Tail Policy shall be borne by the Acquired Companies and such cost will be reflected in the Balance Sheet Date Financial Statements and will have the effect of decreasing the Balance Sheet Date Net Book Value by the full amount of such payment. If purchased by the Sellers, the cost of the Tail Policy shall be borne by the Sellerslegal filings pertaining thereto.

Warranty; Indemnification. (a) For The Sellers, for a period of five (5) years following the Closing Date, subject to a maximum out-of-pocket liability of Four Million Dollars ($4,000,000) (the Sellers (other than the Xxxxxxxx Children Sellers) "Maximum Warranty Amount"), shall jointly and severally, and the Xxxxxxxx Children Sellers shall severally, severally indemnify, defend and hold harmless Standard Pacific, Buyer and their Affiliates (including the Acquired Companies) from Company for any Liability incurred by such Persons as a result of any Warranty Claims that relate to real property developed or homes that close escrow on sold or before constructed by the Company and its Affiliates prior to the Closing Date, to the extent that such Liabilities exceed the sum of (i) the warranty reserve for the Acquired Companies on the Balance Sheet Date Financial Statements (prepared financial statements of the Company as of the Closing Date, which amount shall be mutually agreed by the parties at the Closing, and calculated in conformity accordance with GAAP, GAAP and consistent with the standards, principles, practices and policies of used in connection with the Company in preparing the 2001 Balance Sheet)Financial Statements, and (ii) U.S. $550,000 100,000 (the "Warranty Threshold"), subject to the Maximum Warranty Amount. The indemnity described in the immediately preceding sentence shall include, without limitation, all costs and out-of-pocket expenses (including legal and expert fees) and a reasonable allocation of labor costs for persons performing or directly overseeing the work Buyer deems reasonably necessary to address such Warranty Claims. The Sellers acknowledge that the Maximum Warranty Amount is in addition to exclusive of all insurance proceeds, meaning that the Sellers shall be obligated to pay, pay up to the Maximum Warranty Amount, all Four Million Dollars ($4,000,000) in Warranty Claims that are not paid by insurance and that exceed the Warranty Threshold. The obligation of the Sellers under this Section 6.11 shall terminate on the fifth anniversary of the Closing Date, except to the extent that Buyer notifies the Sellers' Representative in writing of a claim pursuant to this Section 6.11 on or before such date specifying the factual basis of such claim in reasonable detail to the extent then known by Buyer. The Sellers shall be obligated to promptly pay to Buyer the amount of all Warranty Claims in excess of the Warranty Threshold irrespective of whether such amounts may be potentially covered by insurance. If an amount initially paid by the Sellers with respect to a Warranty Claim is later reimbursed to Buyer by applicable insurance policies of the Acquired Companies in effect at the time of the Closing (including the Tail Policy) or prior theretoinsurance, Standard Pacific shall cause Buyer to promptly reimburse Sellers for such payment (after deduction of all out-of-pocket expenses relating to seeking such payment) and the reimbursed payment will not count against the Maximum Warranty Amount or the limitations to the Sellers' liability set forth in Section 7.4(c)Amount. During the five year period referred to herein (or if earlier, until the limitations to the Sellers' liability set forth in Section 7.4(c) have been met), (A) if If at any time the Sellers' Representative xxxx Xxxxxx'x no longer serves continue to serve as an officer officers of the Company, Standard Pacific shall cause Buyer the Company to provide written notice to the Sellers' Representative Sellers of all Warranty Claims reasonably expected to result in settlement or and/or repair expenses in excess of $25,000; (B) Buyer . The Company shall take reasonable actions to defend all Warranty Claims and to seek timely recovery with respect to such claims under applicable insurance policies of the Acquired Companies in effect at immediately prior to the time of the Closing (including the Tail Policy) or prior thereto; and (C) the Closing. The Sellers, at their sole expense, shall have the right to participate in the defense of all Warranty Claims; provided, however, that Buyer the Company shall have the sole right to control the defense and settlement of each such Warranty Claim. (b) The aggregate maximum out-of-pocket liability of the Sellers for Warranty Claims (the "Maximum Warranty Amount"), shall equal $6,500,000, provided, however, that such amount shall be reduced to $5,000,000 if the Acquired Companies prior to the Closing Date, or the Sellers within 90 days after the Closing Date, purchase an insurance policy covering all Warranty Claims that relate to real property developed or homes sold or constructed by the Acquired Companies prior to the Closing Date, which in light of the operations of the Acquired Companies prior to the Closing Date, is in an amount and with coverages, deductibles and other terms that are reasonable and customary for entities engaged in such operations, including an aggregate loss limit of not less than $5,000,000 (the "Tail Policy"). The named insureds under the Tail Policy shall be the Acquired Companies, Buyer and Standard Pacific. If purchased by the Acquired Companies, the cost of the Tail Policy shall be borne by the Acquired Companies and such cost will be reflected in the Balance Sheet Date Financial Statements and will have the effect of decreasing the Balance Sheet Date Net Book Value by the full amount of such payment. If purchased by the Sellers, the cost of the Tail Policy shall be borne by the Sellers.