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SUPPLEMENTAL AGREEMENT <br /> BETWEEN <br /> PUBLIC UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY <br /> AND <br /> THE CITY OF EVERETT <br /> THIS SUPPLEMENTAL AGREEMENT(the"Supplemental Agreement") is <br /> made and entered into this day of , 2007, by and between PUBLIC <br /> UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY(the"District") and the CITY OF <br /> EVERETT, a Washington municipal corporation(the"City"). <br /> WHEREAS,the City and the District previously entered into an Agreement for <br /> multi-purpose development of the Sultan River dated July 21, 1960 (the"1960 Agreement"), and <br /> an Amended Agreement dated November 17, 1981 (the"1981 Amended Agreement"); and <br /> WHEREAS,the 50-year license issued by the Federal Power Commission in 1961 <br /> for the Sultan Project, now referred to as the Henry M.Jackson Hydroelectric Project(the <br /> "Project"), will expire in June, 2011, and a new license must be obtained for the Project from the <br /> Federal Energy Regulatory Commission("FERC"); and <br /> WHEREAS,the parties have agreed that, subject to a declaratory order by FERC, <br /> it is unnecessary for the City to participate as a co-licensee on future FERC licenses for the <br /> Project. <br /> NOW,THEREFORE, it is agreed between the parties as follows: <br /> A. FERC LICENSE <br /> 1. The City and the District agree that subject to a declaratory order by FERC,the <br /> City is not required to be a licensee for any future FERC license for the Project, <br /> following the expiration of the existing FERC license for the Project.The City <br /> will submit a petition to FERC requesting FERC's determination that the City is <br /> unnecessary as a future co-licensee on the Project, and the District will stipulate <br /> to, support,and join in such petition, subject to review of the contents of the <br /> petition, and,provided that the City will stipulate that the District currently has, <br /> through the provisions of the 1960 and 1981 Agreements, all authorizations from <br /> the City necessary to continue project operations and to carry out required FERC <br /> mitigation involving City lands, facilities and property. In the event that FERC <br /> determines the City must remain as a co-licensee for the Project, all of the <br /> remaining provisions of this Supplemental Agreement shall remain fully effective. <br /> Except as provided in this Supplemental Agreement,the City will not be <br /> responsible for any costs associated with the process of re-licensing the Project, <br /> compliance with any conditions imposed by a new FERC license, or any future <br /> decommissioning of the hydroelectric facilities of the Project as may be ordered <br /> 1 <br />