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(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 to
<br />be in violation of, any Environmental Laws.
<br />(3) Upon receiving actual knowledge of the same, Borrower shall immediately advise
<br />City in writing of. (i) any and all enforcement, cleanup, removal or other governmental or regulatory
<br />actions instituted, completed or threatened against the Borrower, or the Property pursuant to any
<br />applicable Environmental Laws; (ii) any and all claims made or threatened by any third party against
<br />the Borrower or the Property relating to damage, contribution, cost recovery, compensation, loss or
<br />injury resulting from any Hazardous Material; (iii) the presence or release of any Hazardous Material
<br />in, on, under, about or from the Property; or (iv) Borrower's discovery of any occurrence or
<br />condition on any real property adjoining or in the vicinity of the Project classified as "Border Zone
<br />Property" under the provisions of California Health and Safety Code, Sections 25220 et seq., or any
<br />regulation adopted in connection therewith, that may in any way affect the Property pursuant to any
<br />Environmental Laws or cause it or any part thereof to be designated as Border Zone Property. The
<br />matters set forth in the foregoing clauses (i) through (iv) are hereinafter referred to as "Hazardous
<br />Materials Claims"). The City shall have the right to j oin and participate in, as a party if it so elects,
<br />any legal 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, Borrower
<br />shall indemnify, defend (with counsel approved by City) and hold the City and its elected and
<br />appointed officers, officials, employees, agents, consultants, and contractors (collectively, the
<br />"Indemnitees") harmless from and against all liability, loss, cost, expense (including without
<br />limitation attorneys' fees and costs of litigation), claim, demand, action, suit, judicial or
<br />administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing
<br />collectively "Claims") resulting, arising, or based directly or indirectly in whole or in part, upon: (i)
<br />the presence, release, use, generation, discharge, storage or disposal of any Hazardous Material on,
<br />under, in or about the Property, or the transportation of any such Hazardous Material to or from, the
<br />Property, or (ii) the failure of Borrower, Borrower's employees, agents, contractors, subcontractors,
<br />or any person acting on behalf of or as the invitee of any of the foregoing to comply with
<br />Environmental Laws, unless caused by the City's active or passive negligence. The foregoing
<br />indemnity shall further apply to any residual contamination in, on, under or about the Property or
<br />affecting any natural resources, and to any contamination of any property or natural resources arising
<br />in connection with the generation, use, handling, treatment, storage, transport or disposal of any such
<br />Hazardous Material, and irrespective of whether any of such activities were or will be undertaken in
<br />accordance with Environmental Laws.
<br />(c) Definitions.
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