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JDK:bc: 10/10/88 <br />rendered in any such action. If OCWD fails or neglects to so <br />defend in said action, RETAILER may defend the same and any <br />expenses, including reasonable attorneys' fees, which it may <br />pay or incur in defending said action and the amount of any <br />judgment which it may be required to pay shall be promptly <br />reimbursed upon demand. Nothing herein is intended to nor <br />shall it relieve RETAILER or any Project Customer or <br />Groundwater Customer from liability for its own acts, <br />omissions, or active or passive negligence. <br />7.2 OCWD shall cause RETAILER to be named as an <br />additional insured on OCWD's general liability policy of <br />insurance with respect to the sale and distribution to <br />RETAILER of Project Water within the service boundaries of <br />RETAILER, and OCWD shall provide RETAILER with certificates <br />of insurance and endorsements evidencing such insurance <br />coverage; provided, however, that nothing shall preclude OCWD <br />from maintaining self insurance with respect to the sale, <br />distribution and use of Project Water, in lieu of purchasing <br />insurance as provided for herein. <br />7.3 OCWD shall not commence nor permit any contractor <br />or subcontractor to commence work on construction of any of <br />the Project Facilities that are located within the service <br />boundaries of RETAILER until OCWD has obtained, or has caused <br />its contractors to obtain, comprehensive general liability <br />insurance providing coverage for bodily injury, personal <br />injury and property damage, and which shall include as <br />additional insureds RETAILER, its officers, agents and <br />25B-26 <br />-24- <br />EXHIBIT 1 <br />