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CM0000888
<br />(c) i ' at'o . At or prior to Closing, Climax will secure the release of, or
<br />obtain reasonably acceptable title insurance over, any lien or notice of lis pendens relating to or
<br />arising out of the litigation in Eagle County District Court Case No. 96CV 129, entitled D. H.
<br />Blattner & Sons v Cynms Climax Metals Co=my, together with any appeal s therefrom, that
<br />may affect the Ptoject Rights or any of the property or easements to be conveyed to the Reservoir
<br />Company at Closing.
<br />(d) Indemnification. The-Reservoir Company agrees to indemnify, defend
<br />and hold harmless Climax from any and all claims, obligations, liabilities, costs, expenses and
<br />attorneys. fees incurred based upon or arising out of any obligations, liability, loss, damage,
<br />expense, of whatever kind or nature, arising out of the use of, or access to, Eagle Park Reservoir
<br />for any type of recreational purpose.
<br />. 11.. Five Year Warranty. (a) Climax shall have a duty and obligation to pay all
<br />reclamation, permitting, modification, repair and construction costs associated with Eagle Park
<br />Reservoir, the Chalk Mountain Interceptor, and the Delivery Facilities (the "Warranted
<br />Facilities") for a period of five years from the conveyance of the respective facilities to the
<br />Reservoir Company (the "Five Year Warranty"). The Five Year Warranty shall include, without
<br />limitation, any and all costs associated with correcting problems with the quality of water in the
<br />reservoir such that the water quality meets all standards for the East Fork of the Eagle River as
<br />determined by the Colorado Department of Health, or preventing seepage from the reservoir.
<br />(b) Any and.all reclamation, construction, and repair of the Warranted
<br />Facilities either before Closing or during the period of the Five Year Warranty, shall be made by
<br />Climax in accordance with applicable federal, state and local dam safety, environmental,
<br />permitting and inspection requirements. Climax hereby agrees to indemnify and hold the
<br />Reservoir Company and its shareholders harmless for any loss, cost, liability or expense resulting
<br />from the reclamation, construction, or repair of the Warranted Facilities by Climax, its agents,
<br />employees or contractors, or from failure of any such facilities resulting from such activities.
<br />(c) Climax shall bear all costs and expenses associated with the reclamation,
<br />design, construction, and procurement of any necessary governmental approvals or permits in
<br />connection with the Warranted Facilities through the Five Year Warranty period.
<br />(d) Climax shall, at its sole cost and expense, obtain, comply with and keep in
<br />full force and effect all permits necessary for the reclamation, construction, operation, and
<br />repair of the Warranted Facilities: through the Five Year Warranty period.
<br />12. Representations and Warranties of Climax. Climax represents and warrants to
<br />the Reservoir Company that:
<br />(a) Climax is a corporation duly formed, validly existing and in good standing
<br />in the State of Colorado:
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<br />666203 08/17/1998 03:10P 23 Sara Fisher
<br />9 of 112 R 561.00 D 0.00 N 0.00 Eagle CO
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