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City of Santa Ana Grant Agreement No. 19-098 Page 9 OPERATION AND MAINTENANCE The grantee shall use,manage, maintain and operate the project throughout the term of this agreement consistent with the purposes for which the Conservancy's grant was made. The grantee assumes all operation and maintenance costs of these facilities and structures;the Conservancy shall not be liable for any cost of maintenance, management, or operation. The grantee may be excused from its obligations for operation and maintenance during the term of this agreement only upon the written approval of the Executive Officer. For purposes of this agreement, "operation costs" include direct costs incurred for material and labor needed for operations,utilities,insurance,and similar expenses. "Maintenance costs" include ordinary repairs and replacements of a recurring nature necessary to prolong the life of capital assets and basic structures,and the expenditure of funds necessary to replace or reconstruct capital assets or basic structures. MITIGATION Without the written permission of the Executive Officer,the grantee shall not use or allow the use for mitigation(in other words, to compensate for adverse changes to the environment elsewhere) of any portion of real property on which the Conservancy has funded construction. In providing permission,the Executive Officer may require that all funds generated in connection with any authorized or allowable mitigation on the real property shall be remitted promptly to the Conservancy. As used in this section,mitigation includes, but is not limited to, any use of the property in connection with the sale,trade, transfer or other transaction involving carbon sequestration credit or carbon mitigation. INSPECTION Throughout the term of this agreement,the Conservancy shall have the right to inspect the project area to ascertain compliance with this agreement. INDEMNIFICATION AND HOLD HARMLESS The grantee shall be responsible for,indemnify and hold harmless the Conservancy, its officers, agents,and employees from any and all liabilities, claims,demands, damages,or costs, including, without limitation,litigation costs and attorneys fees,resulting from or arising out of the willful or negligent acts or omissions of the grantee, its officers,agents, contractors, subcontractors, and employees, or in any way connected with or incident to this agreement, except for the active negligence of the Conservancy,its officers,agents, or employees. The duty of the grantee to indemnify and hold harmless includes the duty to defend as provided in Civil