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

State of Washington Department of Ecology Page 27 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 Not an Excess Indebtedness: For loans secured with a general obligation pledge or a general obligation pledge on special assessments: The RECIPIENT agrees that this agreement and the loan to be made do not create an indebtedness of the RECIPIENT in excess of any constitutional or statutory limitations. Pledge of Net Revenue and ULID Assessments in the ULID(if used to secure the repayment of this loan): For so long as the loan is outstanding,the RECIPIENT irrevocably pledges the Net Revenue of the Utility,including applicable ULID Assessments in the ULID,to pay when due the principal of and interest on the loan. Reserve Requirement: For loans that are Revenue-Secured Debt with terms greater than five years,the RECIPIENT must accumulate a reserve for the loan equivalent to at least the Average Annual Debt Service on the loan during the first five years of the repayment period of the loan. This amount shall be deposited in a Reserve Account in the Loan Fund in approximately equal annual payments commencing within one year after the initiation of operation or the project completion date,whichever comes first. "Reserve Account"means,for a loan that constitutes Revenue-Secured Debt,an account of that name created in the Loan Fund to secure the payment of the principal and interest on the loan. The amount on deposit in the Reserve Account may be applied by the RECIPIENT(1)to make,in part or in full,the final repayment to ECOLOGY of the loan amount or,(2)if not so applied,for any other lawful purpose of the RECIPIENT once the Loan Amount,plus interest and any other amounts owing to ECOLOGY,have been paid in full. Utility Local Improvement District(ULID)Assessment Collection(if used to secure the repayment of the loan):All ULID Assessments in the ULID shall be paid into the loan Fund and used to pay the principal of and interest on the loan. The ULID Assessments in the ULID may be deposited into the Reserve Account to satisfy a Reserve Requirement if a Reserve Requirement is applicable. J.Maintenance and Operation of a Funded Utility: The RECIPIENT shall at all times maintain and keep a funded Utility in good repair,working order and condition and also shall at all times operate the Utility and the business in an efficient manner and at a reasonable cost. K. Opinion of RECIPIENT's Legal Counsel: The RECIPIENT must submit an"Opinion of Legal Counsel to the RECIPIENT"to ECOLOGY before this agreement will be signed. ECOLOGY will provide the form. L.Prevailing Wage(Davis-Bacon Act): The RECIPIENT agrees,by signing this agreement,to comply with the Davis-Bacon Act prevailing wage requirements. This applies to the construction,alteration,and repair of treatment works carried out in whole or in part with assistance made available by the State Revolving Fund as authorized by Section 513,title VI of the Federal Water Pollution Control Act(33 U.S.C. 1372). Laborers and mechanics employed by contractors and subcontractors shall be paid wages not less often than once a week and at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor. The RECIPIENT shall obtain the wage determination for the area in which the project is located prior to issuing requests for bids,proposals,quotes or other methods for soliciting contracts(solicitation). These wage determinations shall be incorporated into solicitations and any subsequent contracts. The RECIPIENT shall ensure that the required EPA contract language regarding Davis-Bacon Wages is in all contracts and sub contracts in excess of$2,000. The RECIPIENT shall maintain records sufficient to document compliance with the Davis-Bacon Act,and make such records available for review upon request. Version 10/30/2015