Indemnification Setoff. 11.1. MSI shall indemnify, defend, and hold harmless LICENSEE and its officers, directors, employees, agents, successors, and assigns against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees, arising out of or resulting from (a) any third party claims, suits, actions, or proceeding related to, arising out of, or resulting from MSI's breach of any representation, warranty, covenant, or obligation under this Sublicense Agreement or (b) any breach of any of MSI’s representations and warranties contained in Sections 3.4, 3.5 or 3.14 hereof. 11.2. LICENSEE will indemnify, hold harmless, and defend MSI; LANS; the sponsors of the research that led to the Technology; the inventors of any invention claimed in patents or patent applications under Patent Rights (including the Licensed Products, Licensed Services, and Licensed Methods contemplated thereunder); their employers; and the officers, employees, and agents of any of the foregoing (each and (“Indemnitee”), against any and all claims, suits, losses, damages, costs, fees, expenses, liabilities, deficiencies, actions, judgments, settlements, interest, awards, penalties or fines of whatever kind if and to the extent resulting from, or arising out of, the exercise of this Agreement, except for any negligent acts of omissions or willful misconduct of an Indemnitee and except for claims or suits brought by an Indemnitee against another Indemnitee. This indemnification shall include, but will not be limited to, any product liability. In addition, LICENSEE may suspend payment of Earned Royalties hereunder if LICENSEE has determined that MSI may have breached a representation, warranty or covenant hereunder (as determined by LICENSEE in good faith) and may setoff the amount of such liability, cost or loss suffered by LICENSEE as a result of such breach.
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Sources: Patent Sublicense Agreement (Manhattan Scientifics Inc)