ITS CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, OR THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS, AND EACH PARTY SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. 12. Indemnity for Patent or Copyright Infringement. ---------------------------------------------- (a) Indemnity. The Company will defend, at its expense, any action brought --------- against MBE and its directors, officers, employees, agents, affiliates, successors, assigns or franchisees ("Indemnitees") based upon a claim that the Service used properly in accordance with the terms of this Agreement and the Subscription Agreement infringes a U.S. patent or copyright or misappropriates a trade secret under U.S. law (a "Claim"). The Company further agrees to pay all damages and costs (including reasonable attorneys' fee and expert witness fees) incurred by any Indemnitee in connection with such Claim. The Company shall have sole control of any such action or settlement negotiations. Without the consent of MBE, which shall not be unreasonably withheld, the Company shall not settle any such Claim in a manner that (i) imposes damages or costs on any Indemnitee not covered by the Company hereunder or (b) imposes any injunctive or other non-monetary relief on any Indemnitee. MBE shall notify the Company promptly in writing of each such Claim and gives the Company all authority, information and assistance, at the Company's expense, reasonably necessary to settle or defend such claim. (b) Remedy Options. If the Service becomes, or in the opinion of the Source: STAMPS.COM INC, 10-Q, 11/14/2000 -------------- Company may become, the subject of a claim of infringement of any U.S. patent or copyright, the Company shall notify MBE, and the Company may, at its option: (i) procure for MBE and MBE Centers the right to use the Service free of any liability or (ii) replace