Under what conditions will Gold Star indemnify a franchisee against damages for infringement?

• 6.8 Notice of Infringement.

FRANCHISEE agrees to advise the COMPANY promptly in writing of any potentially infringing uses of the Marks, or colorable imitations or variations thereof, by others, and of any suits brought, or claims or demands made or threatened against FRANCHISEE involving the Marks.

In the event a third party commences a legal action against FRANCHISEE challenging FRANCHISEE's right to use the Marks as authorized herein, the COMPANY (a) may, in its sole discretion, assume the defense of FRANCHISEE, utilizing counsel of the COMPANY's choice, against such legal action, and (b) shall indemnify FRANCHISEE against all damages for infringement for which FRANCHISEE is held liable in such action resulting from FRANCHISEE's authorized use of the Marks pursuant to and in compliance with the Agreement, provided that:

• 6.8.1 FRANCHISEE provides the COMPANY with timely notice of the institution of the action;

• 6.8.2 FRANCHISEE cooperates fully with the COMPANY's counsel in defending against the action; and

• 6.8.3 The COMPANY retains ultimate control over the strategy involved in defending against and/or resolving the action.

• 6.9 Franchisee's Cooperation.

If the COMPANY undertakes the defense or prosecution of any litigation pertaining to the right to use the Marks, FRANCHISEE agrees to execute any and all documents and to do such acts and things as may be necessary, in the opinion of counsel for the COMPANY, to carry out such defense or prosecution, whether the action is in the name of the COMPANY or in the name of FRANCHISEE.

Subject to Section 6.8, above, FRANCHISEE shall be entitled to retain independent legal counsel, provided that the COMPANY shall not be responsible for the cost of any such legal counsel.

• 6.10 Franchisee's Failure to Cooperate.

Section 6.7 notwithstanding, if FRANCHISEE fails to meet its obligations under Sections 6.8 and 6.9 with respect to any particular event, the COMPANY's warranties and obligations under Sections 6.7 and 6.8 shall become void with respect to such particular event, and the COMPANY shall have no liability for costs incurred or damages awarded against FRANCHISEE. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 6.8, ABOVE, THE COMPANY SHALL NOT BE LIABLE TO FRANCHISEE FOR ANY DAMAGES, COSTS, OR EXPENSES WHATSOEVER, INCLUDING BUT NOT LIMITED TO, ANY LOSS OF PROFITS OR BUSINESS OPPORTUNITIES, OR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER RELATING TO ANY ACTION OR OTHER MATTER INVOLVING THE MARKS OR GOODWILL ASSOCIATED THEREWITH.

Source: Item 23 — Receipts (FDD pages 53–163)