2013 Lease - Mission Ranches Company, LLC/Obata (APN 841-30-004)AGRICULTURAL LEASE
This Lease, dated as of December 12. 2012, is made by and between the South County
Regional Wastewater Authority, a California Joint Exercise of Powers Authority organized and
created pursuant to the laws of the State of California ('`Landlord'') and Mission Ranches
Company, LLC ( "Tenant ") and is made with reference to the following facts:
A. Landlord is the owner of certain real property located in Santa Clara County,
California, identified as Santa Clara County Assessor's Parcel No. 841 -30 -004 'which real
property is depicted on Exhibit`'A° attached hereto (the "Premises "). The Premises contains
approximately One Hundred Forty -One and Eighty -Two One - Hundredths (141.82) gross
acres (approximately One Hundred Thirty -One and Eighty -Two One - Hundredths (131.82)
farmable acres) of land.
& Tenant desires to lease from Landlord, the Premises, on the terms and conditions
set forth in this Lease.
THEREFORE, the patties mutually agree and covenant as follows:
1. Term. Subject to this Section below, the term of this Lease shall commence on —
January 1, 2013 (the "Commencement Date "), and shall terminate on December 31, 2015 (the
"Expiration Date "), subject to sooner termination as set forth in this Lease.
2. Rent. Tenant shall pay to Landlord for the term stated in Section 1 above, rent in
the amount of Forty -Six Thousand Two Hundred Dollars ($46,200.00), payable in two
installments of $23,100.00 per year. The first installment of Twenty Three Thousand One
Hundred Dollars ($23,100.00) is due on or before January 1 of each year of the lease. The
second installment of Twenty Three Thousand One Hundred Dollars ($23,100.00) is due on
or before July 31 of each year of the lease. Rent shall be paid to Landlord in the form of check
or cash, in advance, without deduction, offset, prior notice or demand, at such place as may be
designated by Landlord from time to time. Tenant and Landlord acknowledge that Landlord
may be asked to provide a few acres of land (expected to be approximately two, but exact
acreage subject to further determination) to the California High Speed Rail Authority or a related
entity ("CIISRA ") for use by CHSRA in connection with their project. In that event, Landlord
shall have the right to give Tenant 6 month's notice of a reduction in acreage of the Premises,
which reduction shall take effect automatically upon the date specified in the notice. Rent from
the day specified forward shall be reduced by the reduction, if any, in farmable area, such that
the new rent shall be calculated based upon the ratio that the new farmable acreage bears to
131.82 acres. Tenant shall have no other claim to rental offset, refund, or any other damages of
any sort based upon this change in the Premises, and this Lease shall continue in full force and
effect as to the revised Premises.
3. Notices. Except as otherwise expressly provided by law, any and all notices or
other communications required or permitted by this Lease or by law to be served on or given to
either party by the other party shall be in writing and shall be deemed duly served and given
XF0127628.2
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when personally delivered to the party to whom they are directed, or in lieu of such personal
service when deposited in the United States mail, first -class postage prepaid.
To Landlord: South County Regional Wastewater Authority
cio City of Gilroy Attn: Purchasing Coordinator
7351 Rosanna Street
Gilroy, California 95020
To Tenant: Mission Ranches Company, LLC,
Attn: Sam McKinsey
100 Broadway St.
King City, CA 93930
Either party may change its address for the purpose of this paragraph by giving written notice of
the change to the other party in the manner provided by this Section.
4. Use. Tenant shall use the Premises only for the planting, growing and harvesting
of crops, and for no other purpose. All operations on the Premises shall at all times be conducted
in compliance with all applicable statutes, ordinances, laws, rules and regulations, and shall be
carried on according to the best agricultural practices in the vicinity, including but not limited to
maintenance of the surface of the land to properly maintain the Premises for irrigation and
diligent efforts to remove all noxious weeds and rodents and other pests on the Premises. Tenant
shall not use or permit the use of the Premises for any unlawfirl purpose, shall not commit waste
thereon, and shall not maintain, commit or permit the maintenance or commission of any
nuisance thereon. Tenant shall not apply pesticides, insecticides, fungicides, herbicides or other
chemical treatments that will have a residual effect beyond the term of this Lease, except with
the prior written consent of Landlord.
5. Maintenance and Repair. Tenant agrees to keep the Premises and all
improvements thereon, including but not limited any fences, ditches, wells, pumps, pipes and
roadways (to the extent any such improvements exist), on the Premises in good condition,
reasonable wear and tear and damage by elements excepted. All repairs necessary to the
Premises and said improvements shall be made at Tenant's own expense. If replacement of any
wells, pumps, pipelines or other improvements becomes necessary during the term of the Lease,
replacement costs will be at Tenant's expense. In no event shall Landlord have any obligation to
repair, maintain or replace the Premises or any improvements located thereon.
All utility charges, including but not limited to electrical energy and standby
charges for the operation of any pumps serving the Premises, shall be paid by Tenant. The
procurement of water necessary for the irrigation of the crops to be grown on the Premises shall
be Tenant's responsibility. Such water shall be used only on the Premises and in the
performance of Tenant's obligations under the Lease. Tenant shall not export this water to other
lands without obtaining Landlord's written consent. Landlord assumes no responsibility to
Tenant for any utility or water shortage and assumes no responsibility for and does not warrant
the quality or quantity of any water supplied to the Premises.
%LF41127628.2 -2-
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Tenant shall not make or permit to be made any additions or alterations of the
Premises without first obtaining Landlord's written consent. :Additions to or alterations of the
Premises, except trade fixtures, shall become at once a part of the realty and belong to the
Landlord, except that Landlord may require that Tenant remove all such additions and alterations
made by Tenant upon expiration or sooner termination of this Lease, which obligation shall
survive expiration or termination of this Lease. Tenant shall keep the Premises free and clear of
any and all liens arising out of any work performed or materials furnished at the request of
Tenant, or obligations incurred by Tenant.
6. Subletting and Assignment. Tenant agrees not to assign or transfer this Lease or
sublet any portion of said Premises, or allow any other person to use the Premises, either
voluntarily or involuntarily, without the consent in writing of Landlord, which consent shall not
be unreasonably withheld.
7. Default and Termination. It is further agreed between the parties hereto that all
covenants and agreements on the part of Tenant herein mentioned and contained are express
conditions and that time is of the essence of this Agreement. Should Tenant fail or default in the
faithful keeping or performance of any of said conditions during the term of this Lease, or fail to
promptly pay the rental when due, or abandon, vacate or surrender said Premises, Landlord shall
be entitled to pursue all remedies available to Landlord at law or in equity. Without limiting the
remedies available to Landlord at law or in equity, Landlord shall have the option to terminate
this Lease, or to elect not to terminate Tenant's right to possession, but continue the Lease in
effect and collect rent as it becomes due pursuant to the provisions of section 1951.4 of the
California Civil Code. In the event, however, that Landlord elects to terminate the Lease,
Landlord may recover those damages set forth in section 1951.2 of the California Civil Code,
specifically including, without limitation, the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the amount of rental
loss that Tenant proves could be reasonably avoided, as set forth in subparagraph (3) of
section 1951.2(a) of the California Civil Code.
Tenant agrees to surrender the Premises at the expiration of this Lease, or sooner
termination thereof, in good condition and repair, reasonable wear and tear and damage by the
elements excepted. Should Tenant holdover after the term with Landlord's consent, such
tenancy shall be from month to month only, but otherwise on the same terms and conditions set
forth in this Lease.
P. Indemnification and Insurance. Tenant shall defend through counsel approved by
Landlord, indemnify and hold harmless Landlord, its officers, representatives, agents and
employees against any and all suits, damages, costs, fees, claims, demands, causes of action,
losses, liabilities and expenses, including without limitation attorneys' fees, due to any cause,
including without limitation bodily injury and property damage, which arises out of or is
attributable to the use or occupancy of the Premises or any part thereof, the acts or omissions of
Tenant or Tenant's agents, employees, contractors or invitees. Tenant's breach of this Lease, or
the use by Tenant of any Hazardous Materials on or about the Premises; except to the extent
caused by the willful misconduct or sole negligence of Landlord. Hazardous Materials means
any chemical, substance or material which has been or is hereafter determined by any federal,
1ALR112762E2 -3-
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state or local governmental authority to be capable of posing risk of injury to health or safety,
including without limitation, pesticides, insecticides, fungicides, herbicides and petroleum.
Tenant shall obtain and maintain throughout the Term a policy of Commercial
General Liability Insurance in the minimum amount of One Million Dollars (S1,000,000),
combined single limit for bodily injury and property damage. Such insurance shall specifically
insure Tenant's performance of the indemnity, defense and hold harmless agreement contained
in this paragraph above. although Tenant's obligations pursuant to this paragraph shall not be
limited by the amount of insurance. Such insurance shall be in a company, on forms and with
coverage and loss payable clauses satisfactory to Landlord, and a copy of such policies, certified
by the insurer to be a true and correct copy of the insurance policy, shall be delivered to
Landlord upon execution of this Amendment by Tenant, and a new certified policy shall be
delivered at least thirty (30) days before the expiration of the old policy. Such policy shall not be
cancelable except after thirty (30) days' prior notice to Landlord, shall name Landlord as an
additional insured, shall be primary insurance as respects Landlord and shall contain a cross -
liability endorsement. Such policy shall further provide coverage on an occurrence basis and not
on a claim made basis.
Tenant shall also obtain and maintain throughout the term Workers'
Compensation Insurance as required by law.
Tenant shall comply with all requirements of governmental authorities with
regard to the Premises and shall not do anything on or about the Premises which results in an
increase in any premium on insurance or the cancellation of insurance carried by Landlord,
if any.
9. Condemnation. If a part of the Premises is condemned or acquired for a public
use and the remaining part is susceptible of occupation by Tenant, this Lease shall terminate as
to the part taken on the date title vests in the acquiring agency. The rent payable under this
Lease shall be apportioned in the ratio that the area of the cultivable portion of the Premises not
taken bears to the cultivable area of the Premises before such taking. If all or part of the
Premises are condemned or acquired for public use during the Term of this Lease, Tenant shall
have no right whatsoever to any compensation for the full or partial termination of this Lease or
taking of the land or improvements, either tinder the terms of this Lease or under the Eminent
Domain Law of California, except that Tenant shall be entitled to recover from the condemning
authority the value of any crop which cannot be harvested on the portion so taken. If the entire
or a part of the leased Premises is taken or condemned so that there does not remain a portion
capable of occupation by Tenant, this Lease shall terminate on the date title vests in the
condemnor.
10. "As Is ": Floodins and Overflow. Tenant accepts the Premises, as well as the
improvements thereon and facilities appurtenant thereto, in their present condition, "As Is ",
without representation or warranty of any kind. Tenant agrees with, and represents to Landlord,
that the Premises have been inspected by it and that Tenant has been assured by means
independent of Landlord or Landlord's agents of the truth of all facts material to this Lease, and
that the Premises are being leased by Tenant as a result of its inspection and investigation and
not as a result of any representations made by Landlord or Landlord's agents. Tenant
AN 127628.2 -4-
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acknowledges that the Premises is subject to occasional flooding and overflow of waters, and
may be subject to various easements granted to the Santa Clara Valley Water District. Tenant
accepts the Premises subject to all such conditions. In no event shall Landlord have any liability
to Tenant as a result of any flooding or overflow of waters onto any portion of the Premises or
the exercise by the Santa Clara Vallee Water District of any easement rights it has to any portion
of the Premises. In no case shall such circumstances or exercise of riglits affect Tenant's
obligations under this Lease.
11. Easements and Other Interests. This lease is subject to (a) all existing easements,
servitude, licenses and rights -of -way for canals, ditches, levees, roads and highways, telegraph,
telephone and electric power lines, railroads, pipelines and other purposes, whether recorded or
not; and (b) the rights of other tenants under any existing or fiiture oil, gas and mineral lease or
leases from Landlord affecting the entire or any portion of the Premises, whether recorded or not.
12. Taxes and Assessments. Tenant shall pay, prior to delinquency, all personal
property taxes or assessments levied upon Tenant's personal property situated in or about the
Premises during the term of this Lease. In connection with California Revenue and Taxation
Code section 107.6, Landlord advises Tenant and Tenant acknowledges that by entering into this
Lease, a possessory interest subject to taxes may be created. Tenant shall pay any such
possessory interest taxes which may be levied in connection with this Lease prior to delinquency.
At Landlord's request, Tenant shall execute a memorandum of this Lease in a form requested by
Landlord for recordation in the Official Records of Santa Clara County, California. If such
memorandum is recorded, upon lease termination Tenant shall execute and deliver to Landlord a
quitclaim deed, whereby Tenant quit claims all of its right title and interest in and to the Premises
to Landlord. On demand, Tenant shall provide to Landlord satisfactory evidence of payment of
taxes.
13. Entry y Landlord. Tenant shall permit Landlord or Landlord's agents,
representatives, or employees to enter the Premises at all reasonable times to determine whether
Tenant is complying with the terms of this Lease and for the purpose of doing other lawful acts
that may be necessary to protect Landlord's interest in the Premises. In addition, Landlord shall
have the right to conduct tests and surveys on the Premises, including without limitation
installation of stakes and monuments in connection with Landlord's survey activities, and Tenant
agrees not to disturb any stakes or monuments placed on the Premises by Landlord. Tenant shall
pay, on demand, any costs incurred by Landlord as a result of the disturbance of any stakes or
monuments on the Premises during the term of this Lease, including without limitation any
replacement costs.
14. Attornevs' Fees. Should any litigation be commenced between the parties to this
Lease for the enforcement of any rights of either party against the other pursuant to the
provisions of this Lease, to interpret the Lease, or by reason of any alleged breach of any of the
provisions of this Agreement, the party prevailing in the litigation shall be entitled to receive
from the unsuccessful party all costs incurred in connection with the litigation, including without
limitation reasonable attorneys' fees incurred by the prevailing party.
15. Effect on Heirs and Successors. Subject to Section 7 above, this Lease and each
of its provisions shall be binding on and shall insure to the benefit of the respective heirs,
lALF11127628.2 -5-
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devisees, legatees, executors, administrators, trustees, successors and assigns of the parties to this
Lease.
16. Time of Essence. Time is of the essence of this Lease and of each provision
contained within, and each provision is trade and declared to be a material, necessary and
essential part of this Lease.
17. Amendments to Lease. This Lease may be amended only by a writing signed by
the party against whom or against whose successors and assigns enforcement of the change is
sought. y
18. Effect of Partial Invalidity. If any term or provision of this Lease or any
application thereof shall be held invalid or unenforceable, the remainder of this Lease and any
application of the terms and provisions shall not be affected thereby, but shall remain valid and
enforceable pursuant to this Lease or California law.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of California.
20. Waiver. The waiver by Landlord of any breach by Tenant of any of the
provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent
breach by Tenant either of the same or of another provision of this Lease.
Dated: LANDLORD:
SOUTH COUNTY REGIONAL WASTEWATER
AUTHORITY, a California Joint Exercise of
veers Aut rity organized and created pursuant
the State of California
By:
Thomas J. Haal
Title: City Administrator
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TENANT:
Dated: i�- Mission Ranches Company ,,kLT7--------,
B y:
Sam McKinsey
Title: President
APPROVED AS TO FORM:
BY:
Legal Counsel
IALFAI 127628.2 -7-
121212- 06943001
EXHIBIT "A"
[MAP SHOWING PREMISES TO BE ATTACHED]
bALR1127628.2 _$ _
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,gk.KV CERTIFICATE OF LIABILITY INSURANCE
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TYPE OF INSURANCE I
12/20DIYYY'O
12/20/12
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to
the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the
certificate holder in lieu of such endorsement (s).
PRODUCER Phone: 650 -573 -1111
Andreini & Company -San Mateo Fax: 650 - 378 361
License 0208825
220 West 20th Ave
San Mateo, CA 94403
Marc Andreini
NA
PHONE I FAX
_Lac. No. Ext): _ -- ` (C,.No):__.._
E-MAIL
ADDRESS: _
_
CUSTOMER ID #: MISSI -4
INSURER(S) AFFORDING COVERAGE NA1C # _
INSURER A: Praetorian Insurance Company 137257
------ __._
INSURED Mission Ranches Company, LLC
100 Broadway
King Cif, CA 93930
INSURER B: National Union Fire Ins Co PA E19445
— --
_— _
INSURER C:
INSURER D:
5 100,0D
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_ 5,00
S 1,000,00
INSURER E: _
INSURER F :
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V V YCFCAUro CERTIFICATE NUMBER: or= vtelnu ur luneo.
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
INSR j
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TYPE OF INSURANCE I
A DLL UB
i POLICY NUMBER
POLICY EFF
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POLICY EXP
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LIMITS
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GENERAL LIABILITY
X I COMMERCIAL GENERAL LIABILITY
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CLAIMS -MADE LX I OCCUR
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d� H100100133 1 �
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EACH OCCURRENCE
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MED EXP (Any one p ?rscr)
PERSONAL 8 ADV INJURY
5 100,0D
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_ 5,00
S 1,000,00
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GENERAL AGGREGATE
PRODUCTS - COMPtOP AGG
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$ 2,000,00
S — 2,000,00
GEN L AGGREGATE LIMIT APPLIES PER
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AUTOMOBILE
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LIABILITY
ANY AUTO
ALL OVINEO AUTOS
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04/01/13
COPABINED SINGLE LIMIT
(Ea accident)
1,000,00
I BODILY INJURY (Per person)
S
BODILY INJURY (Per acciden;)'
S
SC HEDULEDAUTOS
PROPERTY DAMAGE
1
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5
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HIRED AUTOS
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$ 5,000,00
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AGGREGATE
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DEDUCTIBLE
RETENTION S
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( ANYPROPRIETOR /PARTNERIEXECUSIVE ❑
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DESCRIPTION OF OPEP -TIONS below
IRnt/Lease /Brw Equi
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IH100100133 -01
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E L DISEASE -EA EMPLOYEE
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E L DISEASE - POLICY LIMIT I S 1,000,00
Limit 500,00
Limit 500,00
DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Attach ACORD 101, Additional Remarks Schedule, If more space Is required)
Re: Lease of real property located in Santa Clara County; Parcel No.
841 -30 -003 and 841 -30 -004. The City of Gilroy its officers, officials and
empployees are included as additional insured or General Liability per Form
CLCNAS0364 attached.
CERIIFICAIEHULDER rA)Jd ri I ATInld
SOUGIL3
SHOULD ANY OF THE ABOVC DESCRIBED POLICIES BE CANCELLED BEFORE
South County Regional
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
ACCORDANCE WITH THE POLICY PROVISIONS.
Wastewater Authority
c/o City of Gilroy
7351 Rosana Street
Gilroy, CA 95020
AUTHORIZED REPRESENTATIVE
(D 1988 -2009 ACORD CORPORATIOt'i. All rights reserved.
ACORD 25 Th.-n A CORD n;_mne and Irlgc t,re s' v
roc,; .:�r�d marks of ACORD
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ iT CAREFULLY.
ADDITIONAL INSURED COMBINED FORM
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL UASILii i COVERAGE PART
This endorsement changes the policy effective on the inception date of the policy unless another date is indicated
below.
Endorsement Effective: 11!112012
Policy Number: H10010013301
Named Misison Ranches Company, LLC
Insured:
Countersigned by:
r
(Authorized Representative!
'Who is an insured" (Section 11) is amended to include as an insured only those categories of person(s) or organi-
zations) described below in paragraphs A, 8 and C with whom you are obligated by a written contract or written
agreement to provide insurance such as is afforded by this policy, but only with respect to the Additional insured's
vicarious liability for your negligent acts or omissions in connection therewith and subject to the following:
A. If the Additional Insured is a lessor of based equipment this insurance does not apply:
(1) To any "occurrence" which takes place after the equipment lease expires.
B. If the Additional insured is the manager or lessor of premises or land which is leased, rented or loaned to you,
this coverage applies only as respects to liability arising out of the ownership, maintenance, or use of that part
of the premises or land leased, rented or loaned to you. However this insurance does not apply to:
(1) Any "occurrence" which takes place after you cease to be the tenant in or on that premises.
(2) Structural alterations, new construction or demolition operations performed by or on behalf of the Addi-
tional Insured.
C if the Additional Insured is on Owner, Lessee or Contractor, this coverage applies only with respect to liability
ccused by operations performed directly by you and/or your employees, for the Additional Insured at a loca-
tion designated in a written contract or agreement.
It is further agreed that no coverage is afforded or extended by this endorsement for any claims arising out of the
negligence or willful misconduct of the Additional Insured.
It is further agreed that we v411 not be responsible for the payment of attorney's fees and costs in the defense of
the Additional Insured that are attributable to claims that do not fall within the coverage of this endorsement, and
gyve have the right to allocate the payment of attorneys fees and costs between covered and uncovered claims at
any time, including upon accepting the Additional Insured's tender of defense.
GL -CN -AS -0304 (09!2004)