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(b) Upon knowledge of any such claim, the Agency shall notify the <br />Developer and its construction contractor of such claim in writing. Upon receipt of <br />such written notice, Developer, and, if applicable, its construction contractor, shall <br />defend at their own expense any suit based on such claim. Such defense shall include <br />provision of separate and independent counsel for the Agency where such counsel is <br />required by the California Code of Professional Conduct, or by common law conflict <br />of interest principles. The Agency shall have the right to choose such independent <br />counsel. <br />If any judgment or claims against the Agency shall be allowed, the Developer <br />and, if applicable, its construction contractor, shall pay or satisfy such judgment or <br />claim and pay all costs and expenses in connection therewith. <br />(c) The obligations to defend, indemnify and hold harmless the <br />Agency, specified in Sections 3.07(a) and (b) above, shall not apply to any claim <br />against the Agency arising from damage caused by the Agency's act or omission or the <br />tortious conduct of the Agency. <br />(d) Developer, the Agency, and Developer's construction contractor <br />shall have an affirmative duty to cooperate with one another in the conduct of any <br />suit arising from this Agreement or from development of the Property pursuant to <br />this Agreement; provided, however, that such duty to cooperate shall be limited by <br />any conflict of interest which arises during the course of any such suit. <br />3.08 Liability Insurance. <br />(a) Developer shall maintain in force during the construction of the <br />Improvements pursuant to this Agreement public liability and property damage <br />insurance, including personal injury, contractual, and owned and non -owned <br />automobiles, with such coverage and limits as may be reasonably requested by <br />Agency from time to time, but in no event for less than the sum of one million dollars <br />($1,000,000) combined single limit. <br />(b) Public liability insurance policy or policies shall name Agency and <br />City as an additional insured, and any policy or policies shall contain cross -liability <br />endorsements. An endorsement shall be provided which states the coverage is <br />primary insurance and that no other insurance held by Agency or City will be called <br />upon to contribute to a loss under this coverage. <br />Disposition and Development Page 35 of 39 <br />Agreement (Automall) <br />10/2/96 <br />