Common use of Warranty Obligations Clause in Contracts

Warranty Obligations. Following the Closing Date, the Purchaser will perform in a cost-effective manner all warranty obligations of the Selling Companies with respect to products manufactured and sold by the Selling Companies prior to the Closing Date pursuant to the terms of the warranties issued by the Selling Companies (the “Seller Warranty Obligations”). The Seller Warranty Obligations to be paid, performed, and discharged by the Purchaser will be limited to the obligations stated under the applicable warranties of the Selling Companies. Products will be deemed to be “manufactured and sold” prior to the Closing Date if such products were completed, sold, shipped and accepted by the customer, and, if required under the terms of the applicable contract, the customer had completed acceptance testing of such products, prior to the Closing Date; products that were not so completed, sold, shipped and accepted prior to the Closing Date or were in raw materials or work in process Inventory will not be deemed to have been manufactured and sold prior to the Closing Date and any warranty obligations with respect to such products will be the sole responsibility of the Purchaser. As consideration for the Purchaser’s performance of the Seller Warranty Obligations, the Seller will pay to the Purchaser the reasonable direct cost (material, labor and overhead) incurred by the Purchaser or its Affiliates in performing such Seller Warranty Obligations to the extent that such warranty claims are for an amount in excess of the Seller’s reserve for warranty claims set forth on the Closing Date Statements, payable within fifteen (15) Business Days of Seller’s receipt of an invoice therefor.

Warranty Obligations. (a) Following the Closing Date, the Purchaser will perform in a cost-effective manner all warranty obligations of the Selling Companies with respect to products manufactured and sold by the Selling Companies prior to the Closing Date pursuant to the terms of the warranties issued by the Selling Companies (the “Seller Warranty Obligations”). The Seller Warranty Obligations to be paid, performed, and discharged by the Purchaser will be limited only to the obligations stated under required to be performed pursuant to the terms of the applicable warranties of the Selling CompaniesSellers in effect as of the Closing and shall exclude any services, upgrades, customer satisfaction work or additions provided voluntarily to any customer and not specifically required to be performed or provided pursuant to the terms of any such warranties. Products will be deemed to be “manufactured manufactured, sold and soldshipped” prior to the Closing Date if such products were completedmanufactured, sold, shipped and accepted by the customershipped, and, if required under the terms of the applicable contract, the customer had completed acceptance testing of such products, prior to the Closing Date; products that were not so completedmanufactured, sold, sold and shipped and accepted prior to the Closing Date or were in raw materials or work in process Inventory will not be deemed to have been manufactured manufactured, sold and sold shipped prior to the Closing Date and any warranty obligations with respect to such products will be the sole responsibility of the Purchaser. As consideration for the Purchaser’s performance of the Seller Warranty Obligations, the Seller Sellers will pay to reimburse the Purchaser for the reasonable direct cost (material, material and labor and overhead) costs actually incurred by the Purchaser or its Affiliates in performing such Seller Warranty Obligations but only to the extent that the aggregate amount of all such warranty claims are costs incurred by the Purchaser or its Affiliates in performing all such Warranty Obligations exceeds $200,000 (the “Warranty Threshold”), whereupon the Sellers shall reimburse the Purchaser for an amount in excess all such costs above the Warranty Threshold, subject to the limitations set forth herein. The reimbursement by the Sellers for the Warranty Obligations is payable within thirty (30) Days of the Seller’s reserve for warranty claims set forth on the Closing Date Statements, payable within fifteen (15) Business Days of Seller’s Sellers’ receipt of an invoice thereforfrom the Purchaser accompanied by a summary of the Warranty Obligations completed, which shall include, at a minimum, the Telefonix Part Number, Customer Part Number, serial number, MOD level (if applicable), original ship date, customer RMA description and a repair summary.

Warranty Obligations. Following SCHEDULE 5.12 sets forth a description of all current and pending warranty and service obligations of Seller to its customers with respect to the Business for equipment sold by Seller within the one-year period prior to the date of this Agreement, including beginning and ending dates of such warranty obligations. Prior to Closing, Seller will update such list to include a description of all warranty obligations of Seller for equipment sold by Seller from the date of this Agreement through Closing with respect to the Business, with beginning and ending dates of such warranty obligations. Except as disclosed on SCHEDULE 5.12, there are no pending or, to Seller's best knowledge threatened, claims under such warranties. A copy of Seller's written warranty on equipment sold by Seller in connection with the Business is attached as SCHEDULE 5.12, and such warranty obligation is and will be the only form of warranty provided by Seller to its customers since at least January 1, 1996. SCHEDULE 5.12 also sets forth under the heading "Amount" a calculation of the "Warranty Reduction Amount" based on sales through the Closing Date, the Purchaser will perform which are set forth in a cost-effective manner all warranty obligations such SCHEDULE. Each of the Selling Companies documents relating to Seller's warranty and service obligations (the "Laclede Obligations") for the Laclede Venture Corporation, Bi-State Development Corporation project is described on SCHEDULE 5.12, and Seller has delivered correct and complete copies of each such document to Buyer. Seller has provided Buyer with respect to products manufactured true, complete and sold by the Selling Companies prior to the Closing Date pursuant to the terms correct copies of each of the warranties issued by the Selling Companies documents described on SCHEDULE 5.12 (the “Seller "Warranty Obligations”Documents"). The Seller Warranty Obligations to be paid, performed, and discharged by the Purchaser will be limited to the obligations stated under the applicable warranties None of the Selling CompaniesWarranty Documents has been amended, nor has Seller waived any right thereunder. Products will be deemed to be “manufactured and sold” prior to the Closing Date if such products were completed, sold, shipped and accepted by the customer, and, if required under the terms of the applicable contract, the customer had completed acceptance testing of such products, prior to the Closing Date; products that were not so completed, sold, shipped and accepted prior to the Closing Date or were in raw materials or work in process Inventory will not be deemed to have been manufactured and sold prior to the Closing Date and any warranty obligations with respect to such products will be the sole responsibility of the Purchaser. As consideration for the Purchaser’s performance of the Seller Warranty Obligations, the Seller will pay to the Purchaser the reasonable direct cost (material, labor and overhead) incurred by the Purchaser or its Affiliates in performing such Seller Warranty Obligations to the extent that such warranty claims are for an amount in excess of the Seller’s reserve for warranty claims Except as set forth on SCHEDULE 5.12, (a) Seller has performed all obligations required to be performed by it to date under the Closing Date StatementsWarranty Documents, payable within fifteen (15b) Business Days Seller is not in breach or default under any such Warranty Document, and (c) to Seller's best knowledge, there exists no condition or event which, after the giving of Seller’s receipt notice or lapse of an invoice therefortime or both, would constitute any such breach or default.

Warranty Obligations. Following the Closing Date, the Purchaser will shall, at the Shareholders’ cost and expense, perform in a cost-effective manner all warranty obligations of the Selling Companies with respect to products manufactured and sold by the Selling Companies Company prior to the Closing Date pursuant to the terms of the warranties issued in connection with such sales which in the case of the Viper T system (also known as TETS) shall be for the initial two (2) year term commencing upon acceptance by the Selling Companies Government, it being understood that the Purchaser shall be responsible for any extension of the Warranty Obligations with respect to the Viper T system beyond the initial two (2) year term provided that such extension is granted after the Closing Date (the “Seller Warranty Obligations”). The Seller Warranty Obligations to be paid, performed, and discharged by the Purchaser will shall be limited to the obligations stated under the applicable warranties of the Selling CompaniesCompany. Products will be deemed to be “manufactured and sold” prior to the Closing Date if such products were completed, sold, sold and shipped and accepted by the customer, and, if required under the terms of the applicable contract, the customer had completed acceptance testing of such products, or were in or finished goods Inventory prior to the Closing Date; products . Products that were not so completed, sold, shipped and accepted completed prior to the Closing Date or were in raw materials or work in process Inventory will shall not be deemed to have been manufactured and sold prior to the Closing Date and any warranty obligations Warranty Obligations with respect to such products will shall be the sole responsibility of the Purchaser. As consideration for the Purchaser’s performance of the Seller Warranty Obligations, the Seller will Shareholders shall pay to the Purchaser the reasonable direct cost (material, labor and overhead) “factory cost” incurred by the Purchaser or its Affiliates in performing such Seller Warranty Obligations Obligations, payable first, to the extent of amounts remaining payable under the Promissory Notes and/or the Contingency Promissory Notes, as a set-off against such amounts, and, if such remaining amounts payable under the Note are insufficient or unavailable, from the Shareholders by wire transfer of immediately available funds to the account designated in writing by the Purchaser. Factory cost shall include all direct costs of labor and materials actually paid by Purchaser net of any recoveries received from suppliers. Purchaser will use its reasonable efforts to perform the Warranty Obligations in the most cost effective manner, utilizing personnel familiar with the subject product and will take all reasonable efforts to have suppliers to the Company pay amounts owed by them with respect to Warranty Obligations or perform the warranty work which they are obligated to perform. Notwithstanding the above, the Shareholders shall have no obligation to pay or reimburse the Purchaser for Warranty Obligations until, and then only to the extent, that such warranty claims are for an amount in excess of the Seller’s reserve for warranty claims set forth on the Closing Date Statements, payable within fifteen Warranty Obligations exceed FIVE HUNDRED THOUSAND DOLLARS (15) Business Days of Seller’s receipt of an invoice therefor$500,000).

Warranty Obligations. Following Effective upon the Closing Date, the Purchaser will perform in a cost-effective manner all warranty obligations consummation of the Selling Companies Closing, Buyer shall assume and agree to pay, perform and/or discharge as and when due any and all Liabilities of Seller under the Warranty Policies with respect to warranty Claims arising out of any and all products manufactured and of the Business manufactured, sold and/or shipped by the Selling Companies Seller on or prior to the Closing Date pursuant to the terms of the warranties issued by the Selling Companies (the “Seller Warranty ObligationsClaims”). The Seller Warranty Obligations to be paid, performed, and discharged by the Purchaser will be limited to the obligations stated under the applicable warranties of the Selling Companies. Products will be deemed to be “manufactured and sold” prior to the Closing Date if such products were completed, sold, shipped and accepted by the customer, and, if required under the terms of the applicable contract, the customer had completed acceptance testing of such products, prior to the Closing Date; products that were not so completed, sold, shipped and accepted prior to the Closing Date or were in raw materials or work in process Inventory will not be deemed to have been manufactured and sold prior to the Closing Date and any warranty obligations with respect to such products will be the sole responsibility of the Purchaser. As consideration for the Purchaser’s performance of the Seller Warranty Obligations, the Seller will pay to the Purchaser the reasonable direct cost (material, labor and overhead) incurred by the Purchaser or its Affiliates in performing such Seller Warranty Obligations but only to the extent that aggregate Warranty Costs, as hereinafter defined, are less than the Claim Threshold, as hereinafter defined. Seller shall reimburse Buyer for all of its costs and expenses in connection with each such warranty claims are for Warranty Claim (“Warranty Costs”), including the cost of repair or replacement with respect thereto, the cost of materials and labor employed in connection therewith, and allocations of overhead as determined by Buyer in its sole and absolute discretion which shall be final, conclusive and binding, but only to the extent that the aggregate of such Warranty Costs exceeds the Claim Threshold. Subsequent to the date upon which aggregate Warranty Costs exceed the Claim Threshold, as determined by Buyer (the “Claim Threshold Date”), Buyer shall deliver to Seller an amount in excess itemized written statement (the “Initial Warranty Costs Statement”) setting forth (i) all Warranty Claims received up to the date of such Initial Warranty Costs Statement (including Warranty Claims through the SellerClaim Threshold Date); (ii) the remedial action taken with respect to each such Warranty Claim; (iii) the Warranty Costs to date with respect to each such Warranty Claim, based upon Buyer’s reserve for warranty claims set forth on processing of, and performance with respect to, such Warranty Claim up to the Closing Date Statementsdate of such Initial Warranty Costs Statement; and (iv) the extent to which the aggregate Warranty Costs have exceeded the Claim Threshold (any such excess, payable within the “Initial Reimbursement Amount”). Seller shall pay to Buyer the Initial Reimbursement Amount not later than fifteen (15) Business Days of days after Seller’s receipt of an invoice thereforthe Initial Warranty Costs Statement.

Warranty Obligations. Following If LF illumination products fail to meet the Closing Dateone year warranty (or HID Components fail to meet the five year warranty), LF Illumination shall correct the Purchaser will perform in a cost-effective manner all warranty obligations defect by shipping to the Customer, at LF Illumination’s option, either necessary repaired or replacement parts without charge to the Customer, provided that the Customer gives LF Illumination written notice of any product defect within thirty (30) days after discovery of the Selling Companies with respect defect and, if requested by LF Illumination, promptly arranges to make the defective products manufactured available to LF Illumination for investigation and sold by the Selling Companies prior correction. No products may be returned to LF Illumination until LF Illumination issues a return Material Authorization to the Closing Date pursuant Customer. Exclusive Remedy The foregoing limited warranty provides the sole and exclusive remedy of the Customer against LF Illumination relating to LF Illumination’s products, whether the claim is made in contract, warranty, tort (including negligence), strict liability or otherwise. Limitation of Liability IN NO EVENT SHALL LF ILLUMINATION, LLC BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE INCLUDING, WITHOUT LIMITATION, LABOR CHARGES, LOST PROFITS OR REVENUES, AND DAMAGE TO ANY RELATED EQUIPMENT, SYSTEM OR FACILITY OR ANY PROPERTY TO WHICH ANY PRODUCT IS AFFIXED. The total liability of LF Illumination on any and all claims of any kind, whether in contract, warranty, tort (including negligence), strict liability or otherwise, arising out of or in connection with the foregoing limited warranty or from the manufacture, sale, delivery, use maintenance, repair, modification or replacement of any products, or the furnishing of any services, shall in no event exceed the purchase price allocable to the terms specific product which gives rise to the claim. This clause shall survive failure of any exclusive remedy. LF ILLUMINATION LIMITED LED WARRANTY LF ILLUMINATION (N Seller) warrants the LED electronics of the warranties issued by properly installed interior lighting products as listed below free from defects in normal use for a period five (5) or ten (10) years (depending on which product is warranted, see spec sheet) from the Selling Companies date of shipment, or 25,000 hours of operation (5 years) or 50,000 hours of operation (10 years) whichever occurs first. This warranty is extended only to the “Seller Warranty Obligations”)original purchaser of these products. The Seller Warranty Obligations LF will replace or repair at its option, any product that is returned that it determines is defective. Usage information must be supplied to be paidthe company to determine and validate hours. This limited warranty does not include installation or removal, performednor does it extend to LED drivers which are warranted for five (5) years. Defects do not include improper installation or operation of these products. This includes alterations, power surges, voltage irregularities, and discharged by the Purchaser will be limited overheating due to the obligations stated under the applicable warranties of the Selling Companiesexternal situations. Products will be To warranty and receive credit for anything that is deemed to be “manufactured and sold” defective, all products must undergo quality inspection prior to the Closing Date if such products were completed, sold, shipped and accepted by the customer, and, if required under the terms determining replacement of the applicable contract, the customer had completed acceptance warranty. Proper testing of such products, prior product can take up to three (3) weeks before determination can be made. In addition to the Closing Date; products that were not so completedunit completely failing, soldit must be in accordance with color shift as outlined in Energy Star Program Requirements for SSL-Version 1.1 within warranty period. THIS EXPRESS WARRANTY STATES THE FULL AND ONLY COMPLETE OBLIGATION OF LF ILLUMINATION. THIS WARRANTY IS EXCLUSIVE OF ALL OTHER STATUTORY BY OPERATION OF LAW, shipped and accepted prior to the Closing Date or were in raw materials or work in process Inventory will not be deemed to have been manufactured and sold prior to the Closing Date and any warranty obligations with respect to such products will be the sole responsibility of the PurchaserOR COURSE OF PERFORMANCE ARE GIVEN. As consideration for the Purchaser’s performance of the Seller Warranty ObligationsTHE ABOVE EXPRESS WARRANTY STATES THE FULL AND COMPLETE OBLIGATION OF LF ILLUMINATION. IMPLIED WARRANTIES OF FITNESS, the Seller will pay to the Purchaser the reasonable direct cost (materialFOR A PARTICULAR PURPOSE ARE LIMITED IN DURATION TO THE TERM OF THE EXPRESSED WARRANTY. THIS COMPANY WILL NOT ACCEPT LIABILITY FOR ANY CONSEQUENTIAL, labor and overhead) incurred by the Purchaser or its Affiliates in performing such Seller Warranty Obligations to the extent that such warranty claims are for an amount in excess of the Seller’s reserve for warranty claims set forth on the Closing Date StatementsSPECIAL OR INDIRECT DAMAGES WHETHER ARISING OUT OF CONTRACT, payable within fifteen (15) Business Days of Seller’s receipt of an invoice thereforTORT, OR STRICT LIABILITY. THERE IS NO LABOR REIMBURSEMENT AT ANY TIME.