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7 1 HWD shall have the right, upon providing written notice to HSD <br />to contest any obligations imposed upon HWD pursuant to the <br />provisions of this Section, and to defer compliance during the <br />pendency of the contest, provided that the failure of HWD to <br />comply will not subject HSD to civil fine or criminal penalty <br />7 2. Notwithstanding the foregoing, in the event that HWD s failure to <br />promptly fulfill the contested obligations shall pose an imminent <br />threat to public health, safety or the environment, HWD shall <br />immediately perform whatever actions may be required to abate <br />the immediate threat HWD may, thereafter, contest the obligations <br />and defer further compliance, as set forth above <br />7.3 Failure of HWD to comply with the provisions of this Section shall <br />be an act of default under the terms of this Agreement and shall <br />entitle HSD to pursue all applicable remedies In addition, HSD <br />shall be entitled to collect from HWD any fines, penalties, expenses <br />of defense (including legal fees) expenses of compliance and other <br />damages incurred by HSD by reason of HWD s default under this <br />Section <br />8 Easement Insurance <br />8.1 HWD shall maintain property insurance (special causes of loss <br />form P1030) on the Reservoir and all facilities placed on the <br />Crestview Site by HWD for the benefit of HSD and HWD, as there <br />interests shall appear, in an amount sufficient to repair or replace <br />the structures <br />8.2. HWD shall maintain comprehensive general liability insurance <br />with a policy limit of not less than $5,000,000 00 per claim covering <br />the actions of HWD on the Easement Area in the construction and <br />operation of the Reservoir <br />83 HSD ,hall be named as an additional insured on the polices of <br />insurance required under this section and shall be provided w ith <br />certificates of insurance evidencing coverage annually at the <br />request of HSD Such certificate shall be subject to the approval of <br />HSD and will reflect coverage placed V, ith insurance companies <br />licensed to do business in the Mate of Washington ith a Best <br />rating of not less than A VIII The certificates I1 ill reflect that <br />coverage cannot be altered or canceled without first providing <br />forty -five (45) days written notice to HSD <br />HWDKI0 /I4/98 <br />