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 or modify the Service to make it non-infringing. (c) Sole and Exclusive Liability. THIS SECTION 12 SETS FORTH THE SOLE AND ---------------------------- EXCLUSIVE LIABILITY OF THE COMPANY FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. (d) Exclusions from Indemnification. The Company assumes no liability, and ------------------------------- shall have no obligation to defend or pay any amounts to any Indemnitee hereunder for (i) any method or process in which the Service may be used by MBE or any MBE Center which is not set forth in the Specifications, (ii) any improper use of the Service by an Indemnitee or (iii) the combination, operation or use of the Service with non-Company software or data, if such infringement could have been avoided but for the combination, operation or use of the Service with such programs or data. 13. Indemnification. --------------- (a) Indemnification by the Company. The Company, at its own expense, will ------------------------------ indemnify, defend and hold harmless MBE, and its employees, franchisees, representatives and -15- agents, against any claim, suit, action, or other proceeding brought against MBE or such party, to the extent that such claim, suit, action or other proceeding is based on or arises from. (i) any misrepresentation or breach or representation or warranty of the Company contained herein; or (ii) any breach of any covenant or agreement to be performed by the Company hereunder. The Company will pay all costs, damages, and expenses, including, but not limited to, reasonable attorneys' fees and costs awarded against or otherwise incurred by