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10 Indemnification. HWD covenants and agrees with HSD that it will <br />indemnify, defend and hold HSD harmless from and against any and <br />all liability, damages, penalties or judgments (including without <br />limitations, attorneys fees) for injury to persons or property sustained <br />by anyone in and about the Easement Area resulting from any acts or <br />acts of omission or commission of HWD, or HWD s officers, agents <br />employees, contractors or assignees HWD shall at its cost and expense, <br />defend against any and all such claims, suits or actions (whether just or <br />unjust) which may be brought against HSD because of any such above <br />mentioned actions HSD shall not be responsible or liable for any <br />damage to any property, fixtures, buildings or other improvements <br />constructed or installed by HWD, or for any injury to any person or <br />persons, at any time on the Easement Area, including any injury to <br />HWD or to any of HWD s officers, agents, employees, contractors, <br />customers or assignees, except as may result from acts or acts of <br />omission or commission of HSD or HSD s officers, agents, employees, <br />assignees or contractors <br />HWDK10 /14/98 <br />11 Destruction by Casualty In the event the Reser% oir shall be damaged to <br />the extent that it is no longer useable as an operational reservoir, HWD <br />shall not be required to rebuild HWD may elect within 180 days after <br />the date of destruction, to terminate this Agreement In that event, <br />HWD shall apply so much of the available insurance proceeds as may <br />be required to satisfy the construction loans, any liens which were <br />expressly approved, in writing, by HSD and to promptly restore the <br />Easement Area to a safe and usable condition in accordance with <br />paragraphs 13 and 14 The remainder of the proceeds if any, shall <br />remain the property of HWD <br />12. Default. <br />12.1. The following shall be events of default under the terms of this <br />Easement Agreement <br />12.1 1 failure to perform the obligations specified in 5eLtion 1, <br />12.1.2. failure to comply with any law, regulation, policy or order of <br />any lawful governmental authorit\ <br />12.1 3 failure to complti with an other pro of this <br />Agreement, <br />12.2. In the event of default, the non- defaulting party shall give written <br />notice of default to the defaulting party specifying the nature of the <br />7- <br />