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(a) Borrower's Obligations Borrower hereby covenants and agrees that:
<br />(1) Borrower shall not knowingly permit the Property or any portion thereof to be
<br />a site for the use, generation, treatment, manufacture, storage, disposal or transportation of
<br />Hazardous Material (as defined in Section 2.14(c)(i) of this Agreement) or otherwise knowingly
<br />permit the presence or release of Hazardous Material in, on, under, about or from the Property
<br />with the exception of limited amounts of cleaning supplies and other materials customarily used
<br />in construction, rehabilitation, use or maintenance of residential properties similar in nature to
<br />the Property and any commercial uses developed as part of the Project, and used, stored and
<br />disposed of in compliance with Environmental Laws (as defined in Section 2.14(c)(ii) of this
<br />Agreement). .
<br />(2) Borrower shall keep and maintain the Property and each portion thereof in
<br />compliance with, and shall not cause or permit the Project or the Property or any portion of either
<br />to be in violation of, any Environmental Laws.
<br />(3) Upon receiving actual knowledge of the same, Borrower shall immediately
<br />advise City in writing of: (i) any and all enforcement, cleanup, removal or other governmental or
<br />regulatory actions instituted, completed or threatened against the Borrower, or the Property
<br />pursuant to any applicable Environmental Laws; (ii) any and all claims made or threatened by
<br />any third party against the Borrower or the Property relating to damage, contribution, cost
<br />recovery, compensation, loss or injury resulting from any Hazardous Material; (iii) the presence
<br />or release of any Hazardous Material in, on, under, about or from the Property; or (iv)
<br />Borrower's discovery of any occurrence or condition on any real property adjoining or in the
<br />vicinity of the Project classified as 'Border Zone Property" under the provisions of California
<br />Health and Safety Code, Sections 25220 et seq., or any regulation adopted in connection
<br />therewith, that may in any way affect the Property pursuant to any Environmental Laws or cause
<br />it or any part thereof to be designated as Border Zone Property. The matters set forth in the
<br />foregoing clauses (i) through (iv) are hereinafter referred to as "Hazardous Materials Claims ").
<br />The City shall have the right to join and participate in, as a party if it so elects, any legal
<br />proceedings or actions initiated in connection with any Hazardous Materials Claim.
<br />(4) Without the City's prior written consent, which shall not be unreasonably
<br />withheld or delayed, Borrower shall not take any remedial action in response to the presence of
<br />any Hazardous Material in, on, under, or about the Property (other than in emergency situations
<br />or as required by governmental agencies having jurisdiction in which case the City agrees to
<br />provide its consent), nor enter into any settlement agreement, consent decree, or other
<br />compromise in respect to any Hazardous Materials Claim.
<br />(b) Environmental Indemnity To the greatest extent allowed by law,
<br />Borrower shall indemnify, defend (with counsel approved by City) and hold the City and its
<br />elected and appointed officers, officials, employees, agents, consultants, and contractors
<br />(collectively, the "Indemnitees ") harmless from and against all liability, loss, cost, expense
<br />(including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit,
<br />judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the
<br />foregoing collectively "Claims ") resulting, arising, or based directly or indirectly in whole or in
<br />part, upon (i) the presence, release, use, generation, discharge, storage or disposal of any
<br />1908324.5
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