WA Dept of Ecology WQC-2016-EverPW-00014 6/8/2016

State of Whshington Department of Ecology Page 25 of 41 Agreement No: WQC-2016-EverPW-00014 Project Title: Cleveland Ave.Sewer Replacement and Stormwater Separation Recipient Name: City of Everett-Public Works Department kind.To secure the repayment of the loan from ECOLOGY,the RECIPIENT agrees to comply with all of the covenants,agreements,and attachments contained herein. 2.For General Obligation. This loan is a General Obligation Debt of the RECIPIENT. 3.For General Obligation Payable from Special Assessments. This loan is a General Obligation Debt of the RECIPIENT payable from special assessments to be imposed within the constitutional and statutory tax limitations provided by law without a vote of the electors of the RECIPIENT on all of the taxable property within the boundaries of the RECIPIENT. 4.For Revenue-Secured:Lien Position. This loan is a Revenue-Secured Debt of the RECIPIENT's Utility. This loan shall constitute a lien and charge upon the Net Revenue junior and subordinate to the lien and charge upon such Net Revenue of any Senior Lien Obligations. In addition,if this loan is also secured by Utility Local Improvement Districts(ULID)Assessments,this loan shall constitute a lien upon ULID Assessments in the ULID prior and superior to any other charges whatsoever. 5. Other Sources of Repayment. The RECIPIENT may repay any portion of the loan from any funds legally available to it. 6. Defeasance of the Loan. So long as ECOLOGY shall hold this loan,the RECIPIENT shall not be entitled to,and shall not affect,an economic Defeasance of the loan. The RECIPIENT shall not advance refund the loan. If the RECIPIENT defeases or advance refunds the loan,it shall be required to use the proceeds thereof immediately upon their receipt,together with other available RECIPIENT funds,to repay both of the following: (i)The Loan Amount with interest (ii)Any other obligations of the RECIPIENT to ECOLOGY under this agreement,unless in its sole discretion ECOLOGY finds that repayment from those additional sources would not be in the public interest. Failure to repay the Loan Amount plus interest within the time specified in ECOLOGY's notice to make such repayment shall incur Late Charges and shall be treated as a Loan Default. 7.Refinancing or Early Repayment of the Project. So long as ECOLOGY shall hold this loan,the RECIPIENT shall give ECOLOGY thirty days written notice if the RECIPIENT intends to refinance or make early repayment of the loan. Method and Conditions on Repayments 1. Semiannual Payments. Notwithstanding any other provision of this agreement,the first semiannual payment of principal and interest on this loan shall be due and payable no later than one year after the project completion date or initiation of operation date,whichever comes first. Thereafter,equal payments shall be due every six months. If the due date for any semiannual payment falls on a Saturday, Sunday,or designated holiday for Washington State Version 10/30/2015