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

•,State of Washington Department of Ecology Page 29 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 material,or useful to the operation of the Utility;or 2. The aggregate depreciated cost value of the facilities or property being transferred in any fiscal year comprises no more than three percent of the total assets of the Utility;or 3. The RECIPIENT receives from the transferee an amount equal to an amount which will be in the same proportion to the net amount of Senior Lien Obligations and this LOAN then outstanding(defined as the total amount outstanding less the amount of cash and investments in the bond and loan funds securing such debt)as the Gross Revenue of the Utility from the portion of the Utility sold or disposed of for the preceding year bears to the total Gross Revenue for that period. 4. Expressed written agreement by ECOLOGY. The proceeds of any transfer under this paragraph must be used(1)to redeem promptly,or irrevocably set aside for the redemption of, Senior Lien Obligations and to redeem promptly the loan,and(2)to provide for part of the cost of additions to and betterments and extensions of the Utility. P. Sewer-Use Ordinance or Resolution: If not already in existence,the RECIPIENT shall adopt and shall enforce a sewer-use ordinance or resolution. Such ordinance or resolution shall be submitted to ECOLOGY upon request. The sewer use ordinance must include provisions to: 1)Prohibit the introduction of toxic or hazardous wastes into the RECIPIENT's sewer system. 2)Prohibit inflow of stormwater. 3)Require that new sewers and connections be properly designed and constructed. 4)Require connections necessary to meet debt obligations associated with the planning and construction of this facility as well as the expected costs of operation and maintenance. Q. Termination and Default: Termination and Default Events 1.For Insufficient ECOLOGY or RECIPIENT Funds. ECOLOGY may terminate this loan agreement for insufficient ECOLOGY or RECIPIENT funds. 2.For Failure to Commence Work. ECOLOGY may terminate this loan agreement for failure of the RECIPIENT to commence project work. 3.Past Due Payments. The RECIPIENT shall be in default of its obligations under this loan agreement when any loan repayment becomes 60 days past due. 4. Other Cause. The obligation of ECOLOGY to the RECIPIENT is contingent upon satisfactory performance in full by the RECIPIENT of all of its obligations under this loan agreement. The RECIPIENT shall be in default of its obligations under this loan agreement if,in the opinion of ECOLOGY,the RECIPIENT has unjustifiably failed to perform any obligation required of it by this loan agreement. Version 10/30/2015