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~ r Licensee's execution and delivery of this Agreement and compliance with all terms hereof, will not conflict with or result in a breach of, or require the consent of any third party under, any license, contract or other instrument to which Licensee or its property is subject; and (iv) there are no pending or threatened actions or other legal or administrative proceeding that would have a material adverse affect on Licensee's right or ability to perform its obligations under this Agreement. 9. INDEMNIFICATION 9.1 Patent and Copyright Protection. PTFS will: (1) assume the defense of any suit brought against the Licensee for infringement of any United States patent or copyright to the extent it is based upon the Software or Documentation provided under this Agreement; (2) defray the expense of such defense; and (3) indemnify the Licensee against any monetary damages and/or costs in such suit; provided that: (i) the liability claimed shall have arisen solely because of PTFS' selection as to the design or composition of the Software, and that the Software is used by the Licensee in the form, state or condition as delivered by PTFS ; (ii) that the Licensee shall have substantially performed all of its obligations under this agreement; (iii) Licensee has not used the Software in a manner inconsistent with the Software's documentation or provisions of this Agreement; and (iv) Licensee has not used the Software in combination with other products not provided by PTFS where the Software standing alone would not have been infringing. THIS ARTICLE STATES THE ENTIRE LIABILITY OF PTFS FOR PATENT OR COPYRIGHT INFRINGEMENT BY THE LICENSED SOFTWARE OR ANY PORTIONS THEREOF. 9.2 Limitations on Indemnity. PTFS shall have no obligation under this Section for any claim that results directly or indirectly from: (i) Any modification, alteration, or change to the Software or Documentation by Licensee or any other party other than PTFS and its authorized agents; (ii) PTFS's use of accepted industry standards or protocols; (iii) Use of the Software in a manner not expressly authorized by PTFS or inconsistent with the Software's documentation or provisions of this Agreement; (iv) Use of the Software in combination with other products if the Software standing alone would not have been infringing; (v) The unlicensed or unauthorized use or distribution of the Software by Licensee; (vi) Use of a superseded release of the Software where such release is the greater of one(1) year old or two major releases (the then current release and the prior release) behind or an altered release of the Software if such infringement would have been avoided by the use of a current unaltered release of the Software; or (vii) Any combination of the foregoing. 9.3 Replacement. In the event the use of the Software and Documentation as delivered to Licensee is, or in PTFS's sole discretion may reasonably be expected to be, subject to a claim under this Section 9, then PTFS may, at its sole option and expense: (i) procure for Licensee the right to continue use of such licensed materials as set forth in this Agreement; (ii) replace or modify such licensed materials to make its use non-infringing, while maintaining comparable functionality, or (iii) buy back the Software at the Licensee's net book value. 9.4 Indemnity by Licensee. Licensee shall indemnify, defend and hold PTFS and its Affiliates, directors, officers, employees, and agents harmless from and against any and all loss, liability, judgment, award and costs (including without limitation legal fees and expenses) finally awarded in favor of a third party or in settlement against PTFS in any claim arising out of or related in any way to: (i) any use of the Software and/or Documentation by Licensee; and/or (ii) any breach by Licensee of any provision of this Agreement. 9.5 Notice and Assistance. An indemnifying Party shall be obligated to provide indemnification hereunder if the indemnified Party (i) notifies the indemnifying Party in writing of any claim within thirty (30) days of first becoming aware of such claim, (ii) permits the indemnifying Party to have sole control of the defense and/or settlement, and (iii) provides all available information, assistance and authority at the indemnifying Party's reasonable expense. The indemnified Party, at its expense, may participate in, but not control, the defense or settlement. If the indemnifying Party fails to assume the defense of such claim within thirty (30) days after receipt of notice of such claim, the indemnified Party will (upon delivering notice to the indemnifying Party) have the City of San Leandro -Page 5-17 CONFIDENTIAL AND PROPRIETARY